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US drug approval numbers fall despite pharma investing more in R&D

Stricter FDA policies are partly to blame for the decline says GBI Research

FDA headquarters White Oak

The number of new drugs approved in the US fell by 1 per cent from 2000 to 2011 despite a near doubling of pharma R&D spending.

Research from GBI Research found that R&D expenditure increased from $26bn in 2000 to $50bn in 2011, a compound annual growth rate (CAGR) of 6 per cent that was not reflected in the number of drugs approved by the Food and Drug Administration (FDA).

GBI put some of the blame on stricter drug approval policies from the FDA, which were implemented following a number of serious safety alerts, such the 2004 withdrawal of Merck & Co's Vioxx (rofecoxib) after it was found to increase the risk of heart attack and stroke.

“[T]he agency has been more cautious in analysing the risks and benefits of drugs before approving them, slowing down or cutting out potentially marketable treatments,” claimed GBI.

But the analysts were also quick to highlight an R&D “drought” due to poor productivity and pointed out that propensity for pharma to look to its existing drug successes rather than always strive for new medicines.

GBI said 55 per cent of the industry's total late stage pipeline was thought to be research focused on extending an existing product's life, rather discovering a new drug, a trend that was less pronounced among the top 20 pharma companies, where just 28 per cent of their pipeline were devoted to such 'life cycle management'.

The GBI report also extolled the virtue of speeding up the R&D process through the use of new technologies and adaptive designs in late phase studies so that pharma companies can benefit from earlier revenue generation as well as extended patent coverage due to earlier approval.

6th September 2012

From: Research, Sales, Regulatory

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