As Ph3 failures spike Big Pharma hits the brakes on R&D spending

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Just in time for BIO's big international confab that begins today in Washington D.C., Thomson Reuters has sized up the industry's dwindling appetite for massive R&D operations. And it's come up with a chilling assessment. With new drug approvals scraping historic lows in 2010, the analysts at Thomson Reuters conclude, biopharma sharply reduced research spending as the number of Phase I and II trials plunged and Big Pharma hit the brakes on late-stage studies.

The number of new drugs shifting into pivotal trials last year nosedived by 55 percent while new Phase I studies dropped  by 47 percent and the number of new Phase II studies dropped by more than half. Looking back over the past three years, the analysts concluded that 55 Phase III studies had been terminated, twice the rate of the previous three years.  

Contrary to some popular thinking in the industry, Thomson Reuters concludes that the chance for success of a new drug program is 20 percent higher when it has been originated in-house rather than in-licensed. And with R&D spending at $68 billion, a three-year low, the data raises questions about Big Pharma's ability to find and develop the new therapies needed to replace tens of billions of dollars in revenue about to be lost to generic drug manufacturers.

"High failure rates continue to be of great concern to the industry and this is compounded by the decrease in NMEs. The strategy of big pharma to in-license more drugs for development does not appear to be paying off at present. An earlier focus on clearing out weak drug candidates will be instrumental to successfully progressing drugs to market," says Phil Miller, product director at Thomson Reuters.

The new report from Thomson Reuters also concludes that patient recruitment is shifting to southeast Asia.

- here's the release

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