How the biopharmaceutical industry works in the United States

The United States accounts for a third of the global market, making it the largest market for biopharmaceutical research and development. The United States firms spend around $75 billion on research and development and have the intellectual property rights on the majority of new medicines.

The biopharmaceutical industry accounts for 4% of the economic output in the United States. Notably, many people make a living out of it, around 800,000 people work in this industry in many occupations, including scientific research, technical support, and manufacturing.

Directly and indirectly, the industry provides more than 4.7 million jobs across the United States. Levels of education are varied but include those who hold a Ph.D. One third of the jobs include STEM occupations.

The United States has an environment that supports the development and commercialization of biopharmaceuticals and does not promote barriers against these. The system of intellectual property supports innovation through patent and data protection. In addition, the regulatory system used in research is considered the most rigorous in the world. Some of the largest scientific research projects are handled at academic institutions with the aid of government research funding.

Development of such products requires extensive research and development and clinical trials in both human beings and animals. The U.S. patent lasts 20 years. In addition, new drugs have least five years of market exclusivity.

Once a patent expires, a different manufacturer can generate a revenue by selling a generic equivalent drug but considering it needs to meet FDA approval and bioequivalence standards. Generic drug sales were estimated to be $70 billion in 2018.

On the other hand, over the counter (OTC) drugs are safe for self-diagnosis and self-medication. In the coming years, the OTC market in the United States will continue to grow as more people are self-medicating and due to the aging population.

Currently, the FDA has more than 500 active investigational new drug applications and receives over a hundred every year. At the rate it is going, more medications will emerge in the coming years and will not be slowing down any time soon.

• Kimberly Parada

References

Biopharmaceutical Spotlight. Biopharmaceutical Industry Spotlight. https://www.selectusa.gov/pharmaceutical-and-biotech-industries-united-states. Accessed April 15, 2020.