Before a drug can be marketed in the US, the drug developer must submit a New Drug Application (NDA) for approval by the Food and Drug Administration (FDA). A report from the Government Accountability Office (GAO) states that between 1993 and 2004, R&D spending went up 147 per cent to $40bn (€30.4bn) but the number of NDAs only increased by 38 percent.
Many people hoped that recent scientific advances, both in the understanding of disease and the technologies used in drug development, would lead to a boom in new drugs. However, as the title of the report states, "Science, Business, Regulatory, and Intellectual Property Issues Cited as Hampering Drug Development Efforts."
This is according to experts convened by the GAO, who say that the pharmaceutical industry has decided to focus on drugs that will produce a high return on investment, so called 'blockbuster drugs,' which reduces the amount of resources available for developing therapies for smaller patient populations and less visible diseases. This strategy has caused a reduction in truly innovative treatments leading the FDA to describe drug development as 'stagnant'.
"Many aspects of the drug development system need to be examined to determine how to encourage research that focuses on breakthrough rather than drug industry profits," said Representative Waxman, who co-wrote the report with Senators Richard Durbin and Edward Kennedy.
This is reflected by the fact that the number of New Molecular Entity (NME) applications, drugs that contain ingredients that have never before been marketed in the US, only increased 7 per cent. Most applications were for modifications to existing drugs.
Smaller pharmaceutical companies are bucking this trend, researching diseases traditionally not investigated by larger firms, thus carving a niche in the market for themselves.
Others are concentrating on developing drugs for infectious diseases that are often ignored because they affect people in poor countries who could not afford expensive new drugs anyway. The Drugs for Neglected Diseases initiative (DNDi) is an example of this, made up of seven organisations that have joined forces to help develop drugs for infectious diseases on a not-for-profit basis.
Of the top pharmaceutical companies, Novartis had the most NMEs and biological licence applications (BLAs) approved since 2000. The Swiss company had 15 such applications approved, followed by 12 from Pfizer, 11 from Sanofi-Aventis and 10 each from Merck & Co and GlaxoSmithKline (GSK).
Pfizer spends by far the most on R&D, have the largest drug pipeline and so submit the highest number of NDAs. Although they have submitted fewer applications than Novartis over the last 6 years, the numbers have been increasing whereas only 6 of Novartis' applications have been since 2002.
The report suggests that current intellectual property protections do not encourage innovation. Even if an existing drug is about to come off patent, a company can easily obtain a new one by making a minor change to the existing product or by offering the old drug as a combination therapy with a new one.
To combat this, the report suggests that the government should offer certain financial incentives or disincentives. One such plan would be to vary patent life between 10 and 30 years depending on a drug's innovative and therapeutic value.
This would also discourage a pharmaceutical company from releasing a drug in the same class as an originator brand, so called 'me too drugs'.
Another recommendation is to allow certain drugs to be given conditional approval if they treat a priority disease. A faster regulatory process would lead to shorter clinical trials on fewer patients. The cost savings from this would encourage pharmaceutical companies to increase development for these diseases.
A further problem cited by the report is a lack of scientific understanding on how to transform research discoveries into safe and effective drugs are slowing down the development of new drugs.
A greater number of drugs aimed at more complex diseases means that researchers are finding it increasingly difficult to predict the efficacy and safety of candidate molecules, especially when research moves into human trials.
This leads to an increase in the number of drug candidates failing clinical trials and subsequently, increased development costs. There is also widespread uncertainly concerning regulatory standards for drug approval.
To tackle these problems, the report suggests increasing the number of physician-scientists who possess both research and medical knowledge and can therefore fully understand the drug development process from inception to marketing.
The number of applications approved by the FDA has generally been declining since 1996 although they do still approve most (76 per cent) applications.
"The findings in this new GAO report raise serious questions about the pharmaceutical industry claims that there is a connection between new drug development and the soaring price of drugs already on the market," said Sen. Durbin. "Most troubling is the notion that pharmaceutical industry profits are coming at the expense of consumers in the form of higher prices and fewer new drugs."