While pharmaceutical sales worldwide reached a record high of $856 billion (£537bn) in 2010, large drug companies produced the lowest number of new medicines in a decade.
The figures are part of the 2011 Thomson Reuters Pharmaceutical R&D Factbook, compiled by the Thomson Reuters business CMR International.
A summary shows that the number of completely new drugs—molecular entities—launched globally has dropped from 26 in 2009 to 21 in 2010.
The situation was especially severe for large pharma companies, which have produced the lowest number of such drugs in 10 years.
In addition, the number of medicines admitted to the first and second phases of clinical trials has dropped by 47 per cent and 53 per cent respectively.
The number of cancer drugs reaching clinical trials, however, has continued to grow.
The report also reveals that the overall spending on pharmaceutical R&D has dropped to $68bn (£43bn) in 2010, its lowest level in three years.
Part of the problem, suggests the report, is that large drug companies increasingly try to license experimental drugs from smaller companies.
But the data shows that drugs developed “internally”, within a company, have a 20 per cent higher chance of reaching the market.
“High failure rates continue to be of great concern to the industry and this is compounded by the decrease in [new molecular entities]. The strategy of big pharma to in-license more drugs for development does not appear to be paying off at present,” said Phil Miller, product director at Thomson Reuters.
“An earlier focus on clearing out weak drug candidates will be instrumental to successfully progressing drugs to market.”
The global results follow a series of setbacks for the UK pharmaceutical industry, including Pfizer’s decision to close its base in Sandwich, Kent, with the loss of 2,000 jobs.
On 27 June, however, it was announced that 350 jobs in science and research will be saved at the centre.
Other major pharmaceutical companies including GlaxoSmithKline and AstraZeneca have announced closures and cutbacks at UK sites.