Despite the common perception that large enterprises dominate the pharmaceutical industry, smaller and medium sized firms also play a significant role. A report from the European Medicines Agency (EMA) proves that fact. According to the EMA, 27 percent of the new drugs introduced to the European market from 2010 to 2012 were developed by small to medium sized pharmaceutical companies.
These SMBs in the EMA report are defined as employing fewer than 250 workers, with an annual revenue of less than 50 million Euros. It seems like “Small Pharma” holds an influence over the industry as a whole.
Academia and Public Firms also play a Role
In addition to the 27 percent of drugs originating from small pharma, another 17 percent were developed by non-profit firms, including academic institutions, public companies, and partnerships between public and private companies. In many of those cases, the non-profit institution developed the drug and then licensed it to a larger company more experienced with the regulatory process.
Still, a large majority of prescribed drugs actually taken by patients in the EMA report were from big pharmaceutical companies. The report noted that 61 percent of “orphan drugs” used to treat rare diseases came from smaller companies.
Making Sense of Small Pharma’s Impact
The impact from smaller pharmaceutical firms comes largely from increased innovation. The EMA report notes as much. “This analysis shows that SMEs, academic institutions, public bodies and public-private partnerships represent an important source of innovation and bolster the product pipelines of larger companies,” concluded the report.
The EMA hopes to provide support to these small pharma companies, hoping to help foster the kind of innovation that benefits the industry and public health as a whole. So when thinking about big pharma, remember that many breakthroughs in pharmacy actually come from smaller organizations.
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