RAPID RESPONSES
Shrinking R&D
It is not correct to blame intensified regulation for the pharmaceutical industry’s woes [Regulation has pushed pharma off a cliff-edge, yesterday]. The statistics actually show that per new drug application, the FDA’s record of approving new drugs has stayed more or less unchanged over the past decade. The problem is that research and development productivity within large pharmaceutical compa-nies has fallen over the same period – the number of new drug applications has decreased, and as a consequence, approvals. That is why larger companies are increasingly outsourcing their medical innovation to smaller, more nimble biotechnology companies. Investors in these smaller companies already know this and are making good returns.
David Pinniger
investment manager