Pharma grinding to a hault?

More evidence recently published by the 2011 Pharmaceutical R&D Factbook indicates that the pharma industry’s productivity is continuing to decline. Fewer new molecular entities were launched in 2010 than in any other year in the past decade. The number of drugs entering Phase I, II and III clinical trials is also declining. R&D expenditure has also dropped to a three year low of $68 billion.

This might imply that pharma was becoming more selective about which targets to put through the long and lengthy clinical trial process. However, the report highlights that drug success rates are low – 55 drugs that reached Phase III between 2008 – 2010 were dropped.

The numbers reflect a new strategy by many pharma companies to in-licensing more drugs from small companies and universities rather develop them in-house. While this saves money and reduces risk, it may not be a sustainable model for pharmaceutical companies going forward. A number of large companies have already pulled their R&D operations out of Europe to move towards an in-licensing model.

Leila Sattary
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