Where in the world are drugs invented? Measuring pharmaceutical globalization.

The global locations of drug invention are important for public health, economic development, and national security reasons. Inventors tend to focus on diseases endemic to where they live. This is one of the problems of neglected diseases — there are few/no researchers working on certain diseases, which can lead to significant public health problems. Drugs are also excellent exports — fetching high prices and being relatively inexpensive to ship — so they can generate foreign currency enabling global trade. The individuals and companies involved in drug development tend to have high wages and revenues, building tax bases. Finally, weak innovative capacity can lead a country to be dependent on others to deliver medicines for domestic needs (see point #1 above) and to resolve health crises.

So, we know that much of drug development, such as medicinal chemistry, compounding, and clinical trials have spread overseas. We also know that much of manufacturing has spread to low wage-cost countries. The remaining question is: Where are drugs invented?

Using a methodology in introduced in my previous publication on the topic, I examined the locations of inventors listed on drug patents from 2000 through 2010 (source: DrugPatentWatch.com). The results are presented below:

1: The US is the global leader in drug inventorship, but is slipping

The top figure shows the relative contribution of each region’s inventors to the set of patents on drugs approved in each year. The data are all normalized, so you can see relative trends in each country’s contribution. The bottom figure below shows the same data, using lines to make it easier to  observe the trends. What is clear is that the US dominance is decreasing and Europe’s representation appears to be rising. The region of East and South Asia appears to be sporadically increasing its representation with it’s activity being mirrored by corresponding decreases in relative European inventorship.

2: Who is gaining?

With US relative inventorship dropping, and European inventorship showing volatility around a relatively flat trend, it is important to ask the question: Who is gaining inventorship as the US drops? One might assume that one or both of the emerging economies China and India are responsible for the increase in Asian drug inventorship, but the data do not support this assertion. The figure above shows the top ten countries where drugs were invented from 2000 through 2010 — China and India are not on the list. Rather, it is pharmaceutical veteran Japan, which has the third most inventors, that is responsible for Asia’s increase. What’s more, the top ten countries is largely comprised of the legacy pharmaceutical countries. That data show that there is no significant migration of pharmaceutical invention from the legacy pharma countries.

This metric represents a useful tool with which to monitor globalization of pharmaceutical innovation. There are two interesting observations that merit further examination. 1) Is there a correlation between the mild US decline and the growth of Japan? 2) Is there a correlation between the spikes in Japan’s relative inventorship and Europe’s sharp dips?

You can also get more detailed information on the complete set of drug inventors and where they live in my Global Drug Patent Inventor Report and Individual Country Drug Patent Inventor Reports.

What do you think of the findings? Are you surprised? Do you disagree? Sound off in the comments.

Third Annual Scientific American Worldview: Measuring Global Biotechnology

The third issue of Scientic American’s Worldview is now available at www.saworldview.com.

In this latest issue I continue my comparative assessment of the biotechnology innovation environment in different countries. I also include additional highlights:

• Which country is home to the most drug inventors?
• Which country has the greatest biotechnology patenting intensity?
• Which country has the greatest relative biotechnology R&D spend?
• Which country has the most global collaboration on innovation?
• Which region has the fastest growing drug market?
• Which country has the largest drug market?
• Which country has the longest drug approval lag
• Which country has the most publications in the field of biotechnology?
• Which country is the largest drug exporter?
• Which country has the strongest public biotechnology markets?

I have also increased the number of countries measured from 38 last year to 48 this year.

The answers to these questions may suprise you. For answers to these questions and more, see the Scientific American Worldview project at www.saworldview.com

Globalization in the pharmaceutical industry: Where are drugs invented?

I’ve just had a paper published in Nature Reviews Drug Discovery, using data from DrugPatentWatch to profile the locations of drug invention for the past decade.

The location of drug development is important for two reasons. Firstly, it is important to track the global spread of innovation. Much late stage drug development (e.g. clinical trials) and manufacturing have moved to lower wage-cost countries, but trends in the location of invention has not been clearly described. Knowing where drug invention is occurring can help streamline drug development by identifying ideal locations for research facilities. Secondly it is important to know where invention is occurring, because that may affect which drugs are developed. Early-stage research funding and, by extension, the research itself, is likely to be focused on conditions affecting the countries in which these activities are occurring. For example, research in the United States might focus on conditions such as heart disease and stroke, whereas research in Japan might emphasize stomach cancer.

By examining the patents covering drugs developed over the last decade, I was able to ascertain the locations of the inventors. Focusing on inventors is important because it gives a clear indication of where the control of the invention was located. Patents are required to list the names and locations of the individual(s) who maintained intellectual domination of the invention. Failure to list all inventors, or listing too many inventors, can yield an invalid patent. Whereas one might consider assessing globalization of invention by focusing on the location of the company funding the research, or the company listed on the patent, these strategies are flawed. The company funding the research may not be the same company which conducted the research (e.g. Japanese companies funded many of the early US biotechnology companies, but the inventions occurred in the US by US researchers, so focusing on the funder might produce the incorrect conclusion that the innovation was Japan-based), and many companies have facilities in multiple countries, making it impossible to determine in which of the countries an invention might have occurred. Looking at the company listed on a patent is also flawed. The company listed on a patent might not have been the company that housed the researchers or, even worse, it may be a tax shelter based in a country where no invention occurred. So, by focusing on the locations of the listed inventors it is possible to determine where the invention occurred. An additional benefit of this strategy is that it enables inclusion of patenters from numerous countries. For example for a patent listing one US-based and two Canadian inventors, the US would be given 1/3 credit for an invention, and Canada 2/3 credit.

So, what did I find? In short, the US and the legacy pharmaceutical countries in Europe (United Kingdom, Germany, Sweden, France and Switzerland) have been responsible for the bulk of new drugs invented over the past decade, and there is no indication that this dominance is waning. Emerging economies such as India and China were largely absent. For more details, please see the paper at Nature Reviews Drug Discovery: Location of pharmaceutical innovation: 2000–2009.

You can also get more detailed information on the complete set of drug inventors and where they live in my Global Drug Patent Inventor Report and Individual Country Drug Patent Inventor Reports.

What do you think of the findings? Are you surprised? Do you disagree? Sound off in the comments.