Benchmarking the Average Drug

If you had only enough money to develop one drug, which therapeutic category would you choose? Based on data of average annual sales, anti-invectives are actually bigger than cardiovascular drugs, perhaps because the entire segment is buoyed by some new, more high priced products. But the best value may be anti-virals, which deliver high annual sales on average, with a relatively short-time to market.

There is, of course, no such thing as the "average drug," but we nonetheless wonder: what can most companies expect from a drug in their pipelines?

We asked Scott-Levin to troll their retail prescription database for an answer. They obliged by averaging the most recent 12 months worth of sales for drugs from several categories.

The results were surprising to us. Thanks in part to some heavy-hitting newer antibiotics, like Biaxinand Zithromax, the average anti-infective was bigger than the average cardiovascular—a nominally larger market (though it does not include the cholesterol-lowering drugs).

The lower-than-expected cardiovascular number likely represents the age of the drugs in the class and some sharp pricing: because so many of the beta blockers and diuretics are generic, those still patented have to keep their prices down, which depresses average sales.

In terms of net present value, antivirals must certainly be among the most profitable therapeutics given their fast-track review times. The average antiviral, a class largely made up of the anti-AIDS drugs the industry once shunned, was almost as big as the average respiratory drug, which competes in a much larger market.

The biggest selling antiviral, the $188 million Retrovir, was nearly three-quarters the size of the biggest selling respiratory medicine, the $256 million Azmacort.

Moreover, the antiviral numbers are even lower than might be expected: because of our inclusion rules, the new protease inhibitors, like Merck's Crixivan, didn't make the group.