Cross posted from Health Affairs Blog
The past decade has seen a relatively constant rate of newly approved drugs every year. The number has even jumped in the past few years. Yet, despite such encouraging trends, we are actually facing a crisis in drug innovation today. That is because many of these new products do not offer substantial improvements over already available alternatives.
At the same time, novel and effective treatments for many diseases—both rare and common—remain elusive. For example, there is widespread concern over the lack of development of new antibiotics aimed at multidrug-resistant infections. Therapeutic innovation for central nervous system disorders such as dementia and psychoses, which affect almost 100 million Americans, has likewise stagnated.
In this climate, pharmaceutical manufacturers have nonetheless continued to thrive. The top eleven drug manufacturers made $711 billion from 2003 to 2012, including $68 billion in 2012 alone, translating to an industry profit margin on par with the banking sector.