Innovation in the Pharmaceutical Industry: The Process of Drug Discovery and Development - Innovation and Marketing in the Pharmaceutical Industry - page 70

2.4 Trends in Pharmaceutical Innovation

Fewer new drugs — symptom of declining innovation productivity ? Despite the
rapidly escalating R&D budgets in the pharmaceutical industry (Fig. 2.3 ), there
seems to be a decline in the number of approved New Molecular Entities (NMEs),
a trend visualized in Fig. 2.4a . The 2010 Pharmaceutical R&D Factbook, compiled
by CMR International (Thomson Reuters), reports that in 2009, new drugs intro-
duced within the last 5 years have accounted for less than 7 % of industry sales.

$80.0

$67.4

$70.0

$65.3

$63.7

$63.2

$60.0

$56.1

$51.8

$49.4

$47.9 $47.9 $47.4

$50.0 $45.8

$43.4

$39.9

$37.0

$40.0

$34.5

$29.8 $31.0

$30.0

$26.0

$30.6 $31.20

$22.7

$27.1 $27.9 $28.5 $28.5 $29.0 $29.3

$21.0

$19.0

$16.9

$20.0

$23.3

$15.2

$20.5

$17.8

$15.6

$10.0

$11.3 $11.9 $12.7 $13.7

$ -

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Total NIH Budget PhRMA Members Enre Pharma Sector

Fig. 2.3 Pharmaceutical R&D expenditure in the USA, in billions of dollars ( Sources : Burrill &
Company, 2011 PhRMA Pharmaceutical Industry Profi le, NIH Offi ce of Budget)

a b

100 $12.0

90

$10.0

80

70

$8.0

60

50 $6.0

40

$4.0

30

20

$2.0

10

0 $-

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

Fig. 2.4 ( a ) Number of new branded drugs in the USA ( b ) Sales of new branded drugs in the USA,
in billion dollars ( Source : IMS Institute for Healthcare Informatics)