News | July 27, 2005

R&D Spending per New Drug is $1.25 Billion

The pharma industry spent an estimated $1.25 billion for each new molecular entity (NME) approved by the FDA in 2004, according to an analysis that appears in the newly released PAREXEL's Pharmaceutical R&D Statistical Sourcebook 2005/2006, the leading compendium on pharma/biotech R&D trends. Last year represented the second consecutive year in which this figure has declined from the high of $1.82 billion in 2002, and reflects the sharp upturn in NME approvals in 2003 and 2004.

The analysis is based on the latest industry R&D spending estimates and FDA statistics on NME and NDA approvals and submissions.

Interestingly, the analysis also shows that the pharma industry spent an estimated $1.25 billion for each NME submission (i.e., to the FDA), which is a metric that peers a bit further upstream into the R&D pipeline. According to PAREXEL's Pharmaceutical R&D Statistical Sourcebook 2005/2006, this measure has been remarkably stable for the last three years, remaining within a narrow range ($1.29 billion to $1.23 billion). Still, the 2004 R&D spending per NME submission metric is almost four times what it was in 1995 ($317 million/NME submission).

Meanwhile, worldwide pharma R&D spending per global new active substance (NAS) launch spiked to a record $2.3 billion in 2004, up 43% from 2003. Global NAS launches fell another 26%, to an all-time low, according to an analysis by Scrip Magazine. Despite the continuing downturn in global NAS launches, worldwide R&D spending rose to $53 billion last year, according to CMR International estimates..

PAREXEL's Pharmaceutical R&D Statistical Sourcebook 2005/2006 is available at www.barnettinternational.com or 800-856-2556, x2176.

SOURCE: PAREXEL

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