The findings challenge a familiar explanation for rising drug costs: that the pharmaceutical market primarily rewards incremental products with aggressive prices. Instead, the researchers found that drugs with unusual molecular structures, distinctive biological targets, or innovative delivery mechanisms gained a growing share of the market after about 2013. Their revenues increased substantially faster than those of less novel medicines, even after estimated rebates and discounts were taken into account.

“Market forces and government policies appear to be evolving in ways that better reward pharmaceutical innovation,” said Darius Lakdawalla, the study’s lead author, chief scientific officer at the Schaeffer Center and USC university professor of pharmaceutical economics and public policy. “As policymakers continue to scrutinize drug spending, our findings suggest this spending is increasingly on treatments more likely to represent true scientific advances.”

To investigate the trend, the USC team analyzed two decades of data covering approximately 600 newly approved small-molecule drugs, including many prescription pills. The researchers developed a framework that measured novelty from three technical perspectives. First, they examined how chemically similar each new drug was to previously approved medicines in the same therapeutic class. Second, they assessed how many other drugs acted on the same biological target. Third, they evaluated the uniqueness of the drug’s absorption and delivery characteristics, which can affect how a medicine reaches and interacts with the body.

Each medicine was classified as having low, medium or high novelty for each of these dimensions. The researchers then connected those classifications to information from the FDA, public databases describing molecular and therapeutic characteristics, and national spending records. Drug-use and expenditure data came from the Medical Expenditure Panel Survey, a nationally representative source that tracks healthcare utilization in the United States. Pricing and rebate information was used to estimate both gross revenue and net revenue after discounts negotiated with health plans and pharmacy benefit managers, or PBMs.

The analysis revealed a major change in the pharmaceutical market beginning around 2013. During the preceding years, the market for less biochemically novel medicines had been expanding, even as the relative share of those products gradually declined. After 2013, however, medicines with the highest levels of novelty began to pull sharply ahead. Average gross revenue for drugs with highly distinctive therapeutic targets rose from roughly $400 million to $1.6 billion by the end of the decade—a fourfold increase that greatly exceeded revenue growth among less novel drugs in the same category.

That widening gap was not explained solely by list prices. The researchers found that the difference between highly novel and less novel medicines largely remained after accounting for estimated rebates paid to health plans and PBMs. At the same time, prescription volumes for highly innovative drugs surged, while prescriptions for less novel medicines declined. The pattern indicates that increased spending on novel drugs was primarily associated with broader use, rather than simply with manufacturers raising prices on a limited number of products.

The results also complicate the common view that the post-2013 increase in pharmaceutical spending was caused mainly by a few breakthrough therapies, including highly effective hepatitis C treatments. Those medicines were important contributors to the overall increase, but the USC analysis found that innovative drugs launched before 2013 also experienced rising revenues. The shift therefore appears to reflect a broader transformation in prescribing and coverage, rather than a temporary spike caused by a handful of spectacularly expensive new therapies.

The researchers suggest that changes in PBM formularies may have helped produce this transformation. PBMs negotiate prescription coverage for health plans and increasingly use restrictive formularies to manage spending. A medicine that has several similarly effective alternatives can be excluded or placed in a less favorable coverage tier, while a genuinely distinctive treatment may face less direct therapeutic competition. If novel drugs are more likely to receive favorable coverage, patients may use them more often, creating stronger commercial incentives for manufacturers to invest in treatments with new mechanisms or delivery systems.

“ Our research shows that the market rewards different forms of pharmaceutical innovation and highlights how reimbursement and formulary decisions can shape whether novel medicines succeed in the marketplace,” said co-author Boshen Jiao, a Schaeffer scholar and assistant professor at the USC Mann School of Pharmacy and Pharmaceutical Sciences. The authors emphasize that novelty does not automatically guarantee clinical superiority, affordability or value, and their analysis does not establish that formulary changes alone caused the market shift. Still, the findings suggest that the economics of drug development may be moving toward a model in which meaningful scientific differentiation is increasingly rewarded. Ian Haworth of the USC Mann School also contributed to the study.

Subject of Research: Pharmaceutical drug novelty, prescription drug spending and the economic rewards for medical innovation

News Publication Date: 3-Aug-2026

Web References: http://www.healthaffairs.org/doi/10.1377/hlthaff.2026.00054; https://www.datawrapper.de/_/hdcKp/?v=4

References: Health Affairs study by Darius Lakdawalla, Boshen Jiao, Ian Haworth and colleagues

Keywords: prescription drug costs, pharmaceutical innovation, drug novelty, me-too drugs, drug spending, health economics, pharmacy benefit managers, PBMs, drug pricing, formularies, healthcare policy, pharmaceutical industry, medical economics

NAMs span complex in vitro and in silico systems designed to generate efficacy and safety evidence while reducing reliance on animal testing. Although many pharmaceutical companies already use these tools during discovery, translating them into regulatory science has lagged. A key challenge remains that NAMs often lack standardized workflows and shared benchmarks, making context-specific validation and qualification essential before regulators can rely on them for specific contexts of use.

Launched in spring 2026, NAMs-DC convenes model developers and engages regulators to build a qualification framework suited to advanced, human-relevant model systems. Rather than treating NAMs as generic assays, the coalition emphasizes reproducibility, performance characterization, and evidence mapping that align scientific readiness with regulatory expectations.

Crown Bioscience brings capabilities centered on patient-derived xenograft (PDX) models, tumor organoids, ex vivo patient tissue platforms, and biomarker analysis. With a large commercially available oncology model library, the company supports translational research by integrating bioinformatics and biomarker services across discovery and clinical development stages.

Importantly, these patient-derived systems can help capture tumor heterogeneity and treatment-response dynamics that are difficult to represent with conventional models. In parallel, biomarker-centric readouts can strengthen the linkage between observed model behavior and measurable biological mechanisms relevant to clinical outcomes.

NAMs-DC Executive Director Nicholas King, M.S., said the coalition’s progress depends on collaboration among developers, end-user companies, and regulators. He added that Crown Bioscience’s experience in patient-derived models and biomarker capabilities offers developers and regulators a clearer route to implementation.

Crown Bioscience Vice President, Research and Innovation Ludovic Bourré, Ph.D., emphasized that validating and qualifying NAMs requires coordinated work with regulators. He noted the coalition’s aim to advance shared qualification approaches that support broader adoption across the drug development pipeline.

As the coalition grows, NAMs-DC will continue bringing together developers and regulators to establish standards that enable confident use of complex NAMs. The overarching goal remains to make model selection and evaluation more efficient—so validated NAM tools can realize their potential for improving treatment decisions.

Subject of Research: New approach methodologies (NAMs) for drug discovery and regulatory qualification, including patient-derived models and biomarker analysis.
Article Title: C-Path NAMs-DC Adds Crown Bioscience as Ninth Coalition Member.
News Publication Date: July 16, 2026.
Web References: https://c-path.org/program/new-approach-methodologies-developer-coalition-nams-dc/ , https://c-path.org/ , http://www.crownbio.com/
References: None provided beyond the coalition and organizational descriptions.
Image Credits: None provided.

Keywords: New approach methodologies, NAMs, C-Path, NAMs-DC, Crown Bioscience, patient-derived xenografts, PDX, tumor organoids, ex vivo tissue, biomarker analysis, regulatory qualification, drug discovery, translational models.

The funding secured in this transformative round will be utilized to propel Insilico’s ambitious drug development pipeline and enhance its cutting-edge AI platforms. An essential facet of this financial infusion will be directed toward refining the company’s AI models and algorithms, an endeavor that could substantially expedite research and development processes. Concurrently, Insilico intends to undertake expansions and upgrades to its high-tech robotics lab, optimizing the automation of key R&D operations. This dual focus on AI and robotics positions Insilico at the forefront of a new wave of efficiency in drug discovery.

One of the critical aspects of Insilico’s strategy is the clinical validation of its leading candidate for idiopathic pulmonary fibrosis (IPF), Rentosertib. This product not only showcases advanced R&D capabilities but also emphasizes Insilico’s dedication to addressing complex medical conditions that desperately need new therapeutic interventions. The funds raised from this recent financing will directly support the scientific and clinical exploration of Rentosertib and other candidates, thereby enhancing Insilico’s portfolio and ultimately contributing to advancements in healthcare.

Dr. Chuen Yan Leung, a partner at Value Partners specializing in healthcare investments, expressed enthusiasm about the partnership. Dr. Leung highlighted Insilico’s proven leadership in life sciences and its commitment to innovation. He articulated a vision not only for financial returns but also for transforming therapeutic development processes, which have historically been slow and costly. This statement reflects a broader trend in the investment community: a growing recognition that technological innovation can fundamentally alter the trajectory of traditional industries, particularly pharmaceuticals.

Insilico’s CEO, Alex Zhavoronkov, echoed Dr. Leung’s sentiments during the announcement of the funding round. He emphasized the importance of the financing in solidifying Insilico’s leadership in AI-driven drug development. The significance of this funding cannot be overstated; it marks an essential milestone in Insilico’s journey, reinforcing the company’s commitment to utilizing AI technologies for transformative healthcare solutions. The oversubscribed nature of the funding round is also indicative of a robust investor appetite for advanced biopharmaceutical products and platforms, particularly those utilizing machine learning.

The substantial progress achieved by Insilico since its previous financing round highlights its dedication to pioneering advanced AI technologies in drug discovery. With proprietary AI-driven models, Insilico has significantly reduced the timelines required for preclinical candidate (PCC) nominations, achieving them in just 12 to 18 months—an industry-leading timeframe when compared with the traditional 2.5 to 4 years. This dramatic reduction in time to market for potential therapies is a game-changer, suggesting that patients may benefit from novel treatments sooner than ever thought possible.

Insilico’s AI platform, titled Pharma.AI, integrates cutting-edge technologies and contains inherent capabilities that make it a highly adaptable resource for drug discovery. The platform is continually updated with advancements in generative AI, ensuring that Insilico remains at the vanguard of technological improvements in life sciences. Recent enhancements include the introduction of innovative engines that leverage large language models, providing unprecedented opportunities for real-time data analysis and molecular structure generation. This sophisticated framework equips Insilico to conduct biological research at an accelerated pace, yielding higher efficiency and efficacy.

Incorporating AI into the drug discovery workflow has led Insilico to develop an extensive portfolio that includes 30 potential drug candidates. Of these, 10 have successfully received Investigational New Drug (IND) clearance, illustrating the platform’s effectiveness and the potential of its drug production capabilities. Rentosertib, in particular, has progressed through a series of clinical trials, achieving promising safety and efficacy results. Notably, in a completed Phase IIa clinical study, Rentosertib demonstrated a favorable safety profile and dose-dependent responses in lung function measures after a relatively short period of administration, thus validating the potential for further clinical exploration.

Financially, Insilico’s business model stands out due to its focus on out-licensing agreements for its drug pipelines. With deals secured with notable companies such as Fosun Pharma and Exelixis, Insilico’s portfolio is not only innovative but also commercially viable. These partnerships, valued collectively at over $2.1 billion, signify a substantial financial mechanism for supporting fledgling drug discovery initiatives and further accelerating the company’s growth trajectory. This strategic orientation strengthens the company’s financial foundations while simultaneously contributing to the broader biopharmaceutical ecosystem.

Furthermore, Insilico has entered various collaborations with industry giants like Sanofi, Saudi Aramco, and Therasid Bioscience, amplifying its reach in the competitive biotech landscape. These alliances, collectively valued at more than $1.4 billion, have resulted in significant milestone payments as Insilico achieves various project objectives, thus enhancing its fiscal sustainability. The collaborative efforts allow Insilico to broaden its impact and viability within the life sciences sector while amplifying innovation through shared expertise and resources.

The commitment underscored by the recent Series E funding rounds positions Insilico effectively to continue its trajectory in leading AI-driven biopharmaceutical research and development. Expanding its collaboration throughout the entire value chain in the pharmaceutical industry forges opportunities for an even broader application of its AI solutions. This growth reinforces Insilico’s mission of advancing healthcare innovation through technology, ultimately aiming to enhance life expectancy and overall quality of life for individuals suffering from various ailments.

Insilico Medicine’s influence and direction in the agglomerated landscape of drug development and biotechnology underscore its vision of interconnecting various disciplines such as biology, chemistry, and computational science. This multispectral approach, fueled by state-of-the-art AI systems, positions Insilico at the helm of a revolution poised to redefine how we think about drug discovery and therapeutic advancements. As adoption of generative AI grows, Insilico remains a key player in heralding transformative solutions to long-standing problems in drug development.

In summary, Insilico Medicine exemplifies the intersection of artificial intelligence and biopharmaceutical innovation. With a robust funding structure that underscores industry confidence, the company is poised to leverage its capabilities to enrich healthcare solutions while continuing to drive research and development in the life sciences sector. By harnessing the power of AI, Insilico is not only setting benchmarks in drug discovery efficiencies but also paving the way for a new era of rapid therapeutic development aimed at meeting the urgent needs of patients around the globe.

Subject of Research: AI-driven drug discovery and development
Article Title: Insilico Medicine Secures $110 Million in Series E Financing to Drive AI Innovations in Drug Discovery
News Publication Date: March 13, 2023
Web References: www.insilico.com, www.valuepartners-group.com
References: Not provided
Image Credits: Not provided

Keywords

The method to synthesize inaoside A is particularly noteworthy given the challenges traditionally associated with constructing α-D-ribofuranosides. While the β-anomers have been extensively studied, the α-forms have remained less frequently synthesized. This scarcity has drawn the attention of organic chemists interested in expanding the repertoire of natural products available for pharmaceutical applications. Kawamura’s team aimed to address this gap by synthesizing inaoside A, emphasizing that understanding its bioactivities is key to harnessing its potential benefits in medicine.

The researchers utilized an α-selective Schmidt glycosylation as a crucial step in their synthetic pathway. This reaction is complex, as it involves the strategic attachment of a glycoside to another molecule in a specified orientation, crucial for targeting the desired bioactivity. The process began with retrosynthetic analysis, a method where scientists work backward from the final product to identify necessary starting materials and reactions. This thorough analysis allowed the team to establish a pathway toward inaoside A that would be both efficient and effective.

The team identified two essential precursors for their synthesis: a ribofuranosyl trichloroacetimidate and an aglycone derived from vanillin. Interestingly, previous methods for synthesizing ribofuranosides often led to a predominance of β-ribofuranosides instead of the desired α-anomers. This challenge required an innovative approach to the substrate used in the Schmidt glycosylation reaction. In their study, the researchers opted for a 2,3,5-tri-O-(tert-butyldimethylsilyl)-protected ribofuranoside, a strategic choice that enabled them to circumvent the issues present in previous synthesis attempts.

The outcome of this approach proved to be a remarkable success, with the researchers achieving a selective synthesis of α-ribofuranoside at an impressive α/β ratio of 4:1 to 5:1. This selectivity is pivotal for retaining the biological activity associated with the α-anomer of the compound, allowing for a more informed investigation into its potential health benefits. The significance of such advancements cannot be understated, as they open avenues for further studies into the bioactivities of inaoside A and related compounds.

As scientists delve deeper into the properties of inaoside A, the implications for its use as a functional food and in pharmaceutical applications become increasingly tangible. The research team stresses the importance of further studies to explore the bioactivity of this compound in greater depth. By elucidating its chemical structure and biological roles, they aim to determine how synthetic mushroom-derived compounds can contribute to health and wellness, potentially serving as leads for new drugs or dietary supplements.

The implications of this synthesis extend beyond just the compound itself; they highlight a broader potential in the utilization of mushrooms in medicinal chemistry. Mushrooms, often underutilized in the realm of natural products, hold a great deal of untapped potential due to their vast array of bioactive compounds. By demonstrating a reliable method to synthesize inaoside A, Kawamura’s research team opens the door for future investigations into other mushroom-derived compounds, which may offer similar benefits.

The increasing interest in functional foods has bolstered the importance of such research, as more consumers turn to natural products for health improvements. As a result, the scientific community’s focus on synthesizing compounds like inaoside A may foster a new era in dietary supplementation and pharmaceuticals, where the biological activity of natural compounds is translated into effective, synthesized versions.

With the successful synthesis of inaoside A, the research team is eager to explore derivative compounds and their structure-activity relationships. This pursuit aims to refine their understanding of how variations in chemical structure can influence biological outcomes, which is crucial for developing targeted therapies. It also ties into broader initiatives to explore the role of natural products in modern pharmacology, encouraging innovations that stem from traditional uses of these organisms.

Beyond just providing a method to synthesize inaoside A, this research underscores the importance of interdisciplinary collaboration within the scientific community. By integrating the expertise of organic chemistry with insights from biology and pharmacology, researchers can pave the way for innovative solutions that bridge the gap between nature and science. This collaborative spirit is essential as researchers unlock the complex biological potential of previously underexplored natural resources.

As researchers continue to investigate the full spectrum of mushroom-based compounds, the findings from this study not only highlight the significant potential of inaoside A but also reinforce the vital role mushrooms can play in the advancement of medicinal chemistry. The ongoing exploration of natural compounds may well hold the keys to future therapeutic breakthroughs that enhance human health and well-being.

In summary, the successful synthesis of inaoside A by researchers from Shinshu University marks a pivotal moment in synthetic organic chemistry and natural product research. As studies progress and the compound is evaluated for its bioactive properties, the research underscores the critical demand for innovative approaches to understanding and utilizing nature’s bounty in the development of new therapeutic and functional food options. The untapped potential of mushroom-derived compounds is vast, and the implications for human health are an exciting frontier that promises further inquiry.

Subject of Research:
Compound synthesis and bioactivity of inaoside A from Laetiporus cremeiporus.

Article Title:
First Total Synthesis of Inaoside A

News Publication Date:
December 13, 2024

Web References:
Asian Journal of Organic Chemistry DOI

References:
Not applicable.

Image Credits:
Dr. Atsushi Kawamura from Shinshu University, Japan.

Keywords

• Organic chemistry
• Mushrooms
• Total synthesis
• Bioactive compounds
• Functional foods
• Drug development
• Natural products
• Pharmaceutical innovation