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Is pharma failing in R&D?

Last year saw increased failure rates in clinical trials, a reduction in the number of new molecular entities launched onto the market and a significant drop in pharmaceutical R&D as a whole. The worrying trends have been highlighted in a new factbook from Thomson Reuters' CMR International unit. Meanwhile, however, the demand for medicines continues to grow, evidenced by an increase in sales, which reached an all time high of 600 billion Euros in 2010.

So the big question is, can pharma keep up with patients' demand for innovative treatments?

At the moment, there seems to be some cause for concern. According to CMR's 2011 edition of the Pharmaceutical R&D Factbook, pharmaceutical R&D expenditure hit a threeyear low of approximately 47 billion Euros in 2010, a reduction of almost 3% compared with 2008 and 2009. Arguably, one of the leading factors behind the decline is a poor return on investment and the difficulties associated with developing new drugs. A news release from Reuters explained that investment in R&D has increased by more than 50% since 2000, while the output of new medicines has gone down.

Between 2008 and 2010, 55 projects failed the final hurdle of Phase III testing, compared with only 26 in 2005–2007. In addition, there has also been a significant decline in drugs entering clinical testing. Compared with 2007, 2010 saw 55%, 53% and 47% less drugs entering Phase III, Phase II and Phase I, respectively. Companies are also finding that it takes much longer to recruit patients into clinical trials. In 2010, patient recruitment for Phase III studies took 20% longer than in 2005. For Phase II, recruitment time increased by 29%.

Overall, only 21 new molecular entities were approved by the FDA's CDER in 2010, compared with 26 in 2009, and only a third of this number came from major companies. In Europe, figures from the EMA also appear to suggest a decline in R&D. In 2010, only 51 positive opinions were issued compared with 117 in 2009. Overall, the EMA started and finalised 34 and 21 marketing authorisation applications for new products, respectively, compared with 35 and 49 in 2009.

These statistics are alarming because the pharma industry is about to see a deluge of patent expiries, with more than 110 drugs set to go off-patent in the US in the next three years, including 14 blockbusters. In addition, although pharmaceutical sales are increasing, the majority are for established products. Only 5% of 2010's sales were driven by products first launched within the last five years.

According to the Factbook, one of pharma's strategies to cope with dwindling R&D is to license in or acquire new compounds. However, this may not be the best option. Various characteristics affect a product's chance of success, such as molecule origin and size, but the research suggests that self-originated molecules have a 20% greater chance of reaching the market.

"High failure rates continue to be of great concern to the industry and this is compounded by the decrease in NMEs," Phil Miller, product director at Thomson Reuters, said in a press release. "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."

One area, however, that is benefitting from increased R&D is anti-cancer, which has seen a positive growth in the number of projects being developed since 2008. In 2010, anti-cancer drugs contributed to more than a third of all new molecular entity launches.

http://cmr.thomsonreuters.com

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