With new and novel medicines launched the last couple of years for such diseases as ­cancer, hepatitis C virus and ­multiple sclerosis, one would think that pharmaceutical pipelines are gradually improving. Think again.

A Bernstein Research report shows that, essentially, “Pipeline success rates across all phases of development have been slowly worsening or at best staying flat, depending on the phase (preclinical through registration).”

Drawing on data from consultancy KMR Group in areas like success rate across development phases and product-cycle metrics, the report by Bernstein analyst Dr. Tim Anderson illuminates what appear to be potentially disturbing trends. First, rates of success have deteriorated. This can be seen most strikingly in Phase II, where win rates went from 34% between 2003–2007, to 25% in 2005–2009, to 22% in 2007–2011. For candidates in Phase III, win rates have gone from 70% to 67% to 65% for the periods 2003-2007, 2005-2009 and 2007-2011, respectively.

The KMR data yield some other striking trends:

• The number of preclinical candidates needed to beget one marketed drug rose 2.5-fold over the past decade. While in 2003–2007, the ratio was 12 preclinical assets for one approved drug, the ratio increased to 24:1 in 2005–2009, then 30:1 for the period between 2007 and 2011.

• The time span between preclinical development and regulatory approval has also inched up, from 11.4 years (for 1999-2001) to 13.7 years (for 2009-2011).

Why does this appear to be happening, especially in the midst of the apparent new-product bonanza? According to Anderson, some potentially confounding factors overshadow the data, including the way KMR clusters its data. KMR groups data by several years at a time, which he says could mask a more recent potential turnaround.

Then there’s the pipeline disruption of recent mega-mergers—three in 2009 (Pfizer+Wyeth, Merck+Schering-Plough and Roche+Genentech)—that have led to fall-out. Companies also may be terminating assets earlier, assassinating those that exhibit incipient signs of hobbled performance. Further, with regulators and payers less apt to approve and pay for “me-too” products, industry’s focus has shifted more toward higher-value and, hence, higher-risk products.

“What you’re seeing is a function of [the industry] pursuing more novel drugs—pushing into disease areas with unmet medical need,” Anderson told MM&M in an exclusive interview. “FDA is forcing folks, and payers are forcing folks, to get into these areas.”

The lack of progress runs counter to Anderson’s perception that, for the last year or two, more novel drugs are reaching market. He added, “Without more granularity it is difficult to know if these factors (i.e., data clustering, R&D disruption of mega-mergers) could be influencing the appearance of [the KMR] data or not.”

At the same time, if the trends bear out and prove true over the next one to two years, this report could be the harbinger of several more lean years for the industry.

Anderson concludes, “It will probably take another year or two to more clearly say whether pharmaceutical industry R&D trends are improving. If this is not happening, then drug companies will continue to limp along, desperately seeking alternate solutions.”

From the October 01, 2012 Issue of MM+M - Medical Marketing and Media