New Drugs Declining, Research Costs Increasing, GAO Says

less innovation is normally considered a bad thing...

Drug companies are becoming less innovative, with the number of new drugs being developed failing to keep pace with the substantial increases in spending on research and development, according to congressional investigators.

A report released yesterday by the Government Accountability Office, the investigative arm of Congress, found that annual research and development spending by the pharmaceutical industry increased 147 percent, to $60 billion, between 1993 and 2004. At the same time, the number of new drug applications to the Food and Drug Administration grew by only 38 percent, and it generally has declined since 1999.

What is more, about two-thirds of the new applications were for drugs that simply represent modifications to existing medicines, while 32 percent were for potentially innovative new drugs.

"Over the past several years it has become widely recognized throughout the industry that the productivity of its research and development expenditures has been declining," investigators wrote in the 52-page report. "That is, the number of new drugs being produced has generally declined while research and development expenditures have been steadily increasing."

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