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GAO: FLAWED DRUG DEVELOPMENT SYSTEM NEEDS CHANGES

December 27, 2006

A new congressional report has concluded that the drug industry's increasing investment in R&D is not resulting in sufficient increases in the new drug pipeline and structural changes are necessary to fix a "stagnant" system.

While drug companies are spending more on R&D, the number of new drug applications (NDAs) submitted to and approved by the FDA has "not been commensurate with these investments," the Government Accountability Office (GAO) said in the Dec. 19 report.

The industry increased its R&D spending from $16 billion in 1993 to nearly $40 billion in 2004, a 147 percent increase, the report found. However, the number of NDAs submitted to the agency increased by just 38 percent during this time. Furthermore, the number of applications for new molecular entities increased by only 7 percent during this time. The report also found that most NDAs were for non-innovative drugs, also known as "me-too drugs."

Democratic lawmakers are using the report to criticize the drug industry. Sens. Dick Durbin (D-Ill.) and Edward Kennedy (D-Mass.) and Rep. Henry Waxman (D-Calif.), who requested the study, argue that the report contradicts industry's basis for rising drug costs.

"This new GAO study refutes many of the pharmaceutical industry's myths about the drug development process," Waxman said. "Most prominently, it indicates that the link between high research expenditures -- which the industry claims must be driven by high prices -- and new drug development is unclear at best."

The GAO report is available at www.gao.gov/new.items/d0749.pdf (http://www.gao.gov/new.items/d0749.pdf).

(http://www.fdanews.com/did/5_247/)