Analysis shows pharma is getting better at R&D

A new analysis of pharma research and development data shows that drugmakers have become increasingly successful in identifying the right candidates for drug development and getting them to market in recent years.

From 2010 to 2014, one out of every 13 drugs in phase-I development came to market—compared to one of 19 phase-I drug candidates making it from 2007 to 2011, according to an analysis by brokerage firm Sanford C. Bernstein of KMR Group's R&D data.

The market research firm receives data from fourteen large drugmakers including Novartis, Pfizer, Sanofi, Bristol-Myers Squibb and Eli Lilly, who submit blinded R&D information to KMR for benchmarking purposes.

The report looked at success rates in five categories of drug development: pre-clinical, Phase I, Phase II, Phase III and registration.  

Over the last four years, 5% of preclinical drugs made it to market—up from 3.3% from 2007 to 2011—and slightly higher than the approval rate of 4.3% reported between 2005 and 2009.

Pharma executives and PhRMA, the trade group that represents pharma companies, have often defended themselves from criticism—particularly relating to the high prices of specialty medicines—by citing the difficulty and great costs of drug research and development.

PhRMA declined to comment on why it believes R&D productivity has risen.

The data show certain drugs had better chances of reaching the market than others. Eighteen small-molecule drugs in Phase-I trials yielded one marketed product from 2010 to 2014. Over that same four-year period, seven large-molecule biologics yielded one marketed treatment. Small molecules are chemically manufactured active substances, biologics are drugs based on proteins that have a therapeutic effect.

Bernstein analyst Tim Anderson said in a report that the yield for small-molecule drugs has improved slightly, while the yield for biologic drugs has remained constant since 2007.

Drugs were also more successful in advancing through late-stage clinical trial phases in recent years. The report found that 29% of drugs moved from Phase-II to Phase-III trials from 2010 to 2014, compared to only 22% of drugs making it to late-stage trials from 2007 to 2011. Sixty-nine percent of drugs advanced to registration from Phase-III from 2010 to 2014, compared to 62% from 2007 to 2011.

While it may take less treatment candidates to put a branded product on the pharmacy shelf, Anderson found that the drug-development cycle—defined as the time it takes to complete human studies—continues to gradually increase. Developing a drug takes 10 years on average currently, which is 40% longer than it took 15 years ago.

Drug discovery—defined as all the work leading up to human clinical trials—has remained steady, taking four years on average.

Anderson conjectured that the rise in drug-development time might reflect “certain scientific advances,” like the sequencing of the human genome.