U.S. New Drug Approvals at 8 Year Low; R&D Spend Hits $40B

U.S. regulators approved 18 new drugs in 2006, close to an eight-year low, as the number of medicines recommended for sale in 2006 and 2005 dropped from the annual average of 26 drugs recorded in the previous six years, according to U.S. data. 

Drugmakers are spending more on research and developing fewer drugs. 

  • The annual research and development expenses reported by the pharmaceutical industry rose to $40 billion in 2004 from $16 billion in 1993, a 147% increase, according to inflation- adjusted industry figures cited by the U.S. Government Accountability Office in a December report.
  •  During the same period, applications to market drugs that attack disease in a novel way increased 7%.

During the past eight years, the high point for approvals was 35 in 1999 and the low was 17 in 2002, according to data on the FDA

The FDA in 2006 cleared 4 new biotechnology drugs. Between 1999 and 2005, the number of annual biotech approvals has ranged from a low of 2 to a high of 7, according to data compiled by analysts.

Pfizer and Merck each had two new drugs approved, the most of any company. New York-based Pfizer's Sutent 

2006 new approvals include Pfizer Inc.'s cancer treatment Sutent and Merck & Co.'s diabetes drug Januvia. Shares of Merck declined 25% in the past five years while Pfizer's shares had fallen 34% over five years. The S&P 500 Health Care Index dropped 18% in the past five years as of yesterday. 

Related discussion at Bloomberg: Merck, Pfizer Medicines Lead List of 18 U.S. Approvals in 2006

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