ABSTRACT

The Tufts methodology for calculating profitability depends on a great number of different inputs, is of necessity complex and relies on numerous assumptions. A much-quoted report published in 2002 by Henry Grabowski of Duke University and Joseph DiMasi of Tufts University Center for the Study of Drug Development concluded that the top 10 per cent of products by sales generate half of total profits. It also concluded that only 30 per cent of new products from the 1990s covered their costs. A few of the products appearing in the Pharma Live Top 500 product rankings are not new chemical activities or active substances. There are combination products whose components are already on the market as plain products. The number of new products launched each year between 2002 and 2008 fluctuates. The balance of total profitability is not as heavily weighted against non-blockbusters as Grabowski et al. have suggested.