The answer to stagnating R&D can be found in the creativity of the movie industry.
The number of new drugs that the US Food & Drug Administration has approved has fallen by half since 1996, with only 20 approved in 2005. That was the second lowest number of approvals in the history of the agency. Failures in the last stage of clinical development, Phase III, are particularly excruciating. Phase III trials consume 70% of clinical development costs, yet 40% of compounds now fall at this final hurdle compared to only 20% failing 10 years ago. Half of the failures come from inability to demonstrate superiority to a placebo, 30% are due to safety concerns, and 20% occur because no advantage relative to available therapies can be shown. These failures have a high profile and tend to perturb perceptions about the companies concerned, especially among investors. [...]
There is a precedent for pharma emulating Hollywood: Pharma's main preoccupation, the creation of blockbusters, was directly copied from Hollywood. The blockbuster model is really defined by broad and aggressive marketing, though the term is less accurately, if more commonly, used to define revenue thresholds. Hollywood's blockbuster model was created in 1951, when the term was first applied to the movie Quo Vadis because of its then-huge budget of $7 million and the unprecedented zeal of its promotion.
Glaxo created the first pharma blockbuster in the 1980's with the ulcer medication, Zantac. The drug was a modestly effective but very safe compound that ultimately attained sales of more than $2 billion a year as a result of extremely aggressive marketing.
