Lack of R&D output a worrying sign for big pharma

Pharmaceutical companies continue to be heavily reliant on sales form their mature drugs, while investment in R&D and clinical trials for their successors has shown a marked decline.

That’s according to the 2010 Pharmaceutical R&D Factbook, an industry form guide published by CMR International, a subsidiary of Thomson Reuters. It found that among many of the world’s top pharma companies, the top three selling drugs accounted on average for 44 percent of total sales.

Total industry sales for drugs five years old or less fell below 7 percent last year, compared to 8 percent for 2008, while R&D expenditure fell 0.3 percent last year, ending several years of positive growth. Anti-cancer drugs accounted for the biggest share of R&D spending, at just under 18 percent.

CMR noted a doubling of phase III terminations between 2007-2009, compared to 2004-2006, with further data analysis showing that fewer than 1 in 10 drugs reaching ‘first toxicity’ are now expected to progress to market.

"The latest data shows that poor productivity in 2009 continued to be exasperated 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.

On a brighter note, the industry welcomed a total of 26 new molecular entities (NME) last year, six more than appeared in 2008.

Nevertheless Poulsen expressed concern about the effects of falling R&D output on the pharmaceutical industry in the face of rising completion from generics companies, particularly from India and China.

“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 [pharmaceutical] industry can reverse a 10-year trend in declining R&D output."