Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.

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More bad news on pharma R&D productivity

CMR International, a firm that tracks that performance of the pharmaceuticals sector, released a rather depressing report on research and development productivity last week. The report will set you back $10,000, but highlights have been made public:

- A total of 26 new molecular entities (NMEs) were launched onto the global market in 2009, an increase on 2008's 20-year low of 21. But the number of launches last year was still only a little more than half the peak level in 1997.

- The number of experimental drug projects terminated at the final Phase III stage of development had doubled in the period 2007-2009 compared with 2004-2006.

- Total global R&D expenditure dropped by 0.3 percent in 2009, after a 6.6 percent rise in 2008 and rapid growth seen in earlier years.

- Pharma is having a tough time selling its new drugs: New drugs launched within the last five years accounted for less than 7 percent of industry sales in 2009, down from 8 percent in 2008, highlighting the big problems that companies are having in trying to reinvigorate their portfolios.


Things are not going well for Big Pharm.

I read that for the first time in decades the number of new drugs approved by the FDA was going to be fewer than the drugs going off patent (either 2009 or 2010 - I forget which).

I also read last year that the reason for the explosion in new drugs (something about breakthroughs in understanding of how certain chemicals reacted in the human body) that has lasted for several decades has pretty much exploited the "surface gold," so to speak. New drugs are going to be more expensive to find and develop, which means that new drugs are going to require more R&D to find and will likely be more expensive.

Another issue that has been raised is that many new drugs are either less effective or may, in some cases, be completely ineffective to treat the problems they were developed to fight. In some other cases, the drugs have such horrible side effects that the FDA has pulled some new drugs off the market.

The bottom line is that the years of finding easy winners and milking them appear to be drawing to a close. The future winners are going to be much harder to find and likely will take longer to find. Big Pharm may be in for further, significant down-sizing. Mini-Pharm?

And now the "patent cliff" is fast approaching. Maybe all of this is one reason why we're starting to see more and more companies incorporating an NPE-type (formerly "patent troll") business model into their more traditional structures. They've got to go where the money is.
Pharmeseuticals are very important to provide us with effective medicines.more and more research should be made on this in order to discover more effective and less expensive medicines.But it's a matter of regret now-a-days business make this issue quite polluted,as during a few decades less effective are being launched. ossf

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