Pharma pipelines mired by poor productivity, shrinking R&D budgets

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With drug approvals for new chemical entities running at about half the level of the peak registered in 1997, pharma companies are actually seeing a reduction in the amount of money they earn from drugs approved in the previous five years, according to new research from Thomson Reuters. And overall R&D spending dipped 0.3 percent last year, as the momentum behind cuts in pharma pipeline budgets continued to gain speed.

"The latest data shows that poor productivity in 2009 continued to be exacerbated by the low success rate for drugs in late stage development and a decline in sales from new drugs launched within the last five years," said Hans Poulsen, head of consulting at CMR International, which compiled the 2010 Pharmaceutical R&D Factbook. "The increase in NME launches compared with 2008 offers some positive news. However, with data indicating a continued drop in overall success rates, it remains to be seen if the industry can reverse a 10-year trend in declining R&D output."

Some highlights:

  • The number of Phase III projects killed in 2007 to 2009 doubled the rate seen in the previous three years.
  • Analysts expect that Big Pharma will continue to cut research budgets as they reshape their R&D efforts.
  • Drugs launched in the previous five years accounted for seven percent of all sales in 2009, down from eight percent in 2008.

- here's the report from Reuters

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