Jan. 4 (Bloomberg) -- U.S. regulators approved 18 new drugs in 2006, close to an eight-year low, as drugmakers struggled to develop products for hard-to-treat disorders.
The number of medicines recommended for sale in 2006 and 2005 dropped from the annual average of 26 drugs recorded in the previous six years, according to U.S. data. Last year's approvals include Pfizer Inc.'s cancer treatment Sutent and Merck & Co.'s diabetes drug Januvia.
Drugmakers are spending more on research and developing fewer drugs, the U.S. reported last month. The failure rate of compounds in testing has increased as companies target intractable diseases, a government study said. London-based AstraZeneca Plc, for example, scuttled three experimental drugs last year, including treatments for diabetes and stroke.
"This is another year of disappointingly low innovation by the industry," said Jerome Avorn, a professor of medicine at Harvard University and author of "Powerful Medicines: The Benefits, Risks, and Costs of Prescription Drugs." "They are spinning their wheels more because they do not seem to be lean, mean research machines anymore."
The annual research and development expenses reported by the pharmaceutical industry rose to $40 billion in 2004 from $16 billion in 1993, a 147 percent increase, according to inflation- adjusted industry figures cited by the U.S. Government Accountability Office in a December report. During the same period, applications to market drugs that attack disease in a novel way increased 7 percent.
Most applications to the U.S. Food and Drug Administration to market drugs in recent years have been for modifications to existing drugs instead of completely new ones, according to the GAO, the investigative arm of Congress.
Last year was the second in a row that 18 "new molecular entities," or drugs with novel chemical ingredients, were approved. During the past eight years, the high point for approvals was 35 in 1999 and the low was 17 in 2002, according to data on the FDA's Web site.
The U.S. rejected several applications to sell new drugs last year such as Sanofi-Aventis SA's Multaq treatment for irregular heartbeat and Genta Inc.'s Genasense to treat patients with chronic lymphocytic leukemia
The FDA hasn't yet tallied the number of new drug applications submitted last year, or the number rejected by the agency, said spokeswoman Susan Cruzan. The FDA annually releases a report with statistics about new drug applications and approvals. The agency won't disclose the names of rejected drugs, saying the information is proprietary.
The Pharmaceutical Research and Manufacturers of America, the industry's Washington-based trade group, isn't prepared to explain the declines in new drug approvals, said Alan Goldhammer, a regulatory affairs official with the association.
The experimental drugs are for increasingly complex diseases that are difficult to treat and research is costing more, he said. Nonetheless, Goldhammer said, "the drug development process is alive and well."
Drugmakers, including New York-based Bristol-Myers Squibb Co., acknowledge they're having increasing difficulty developing new medicines. Bristol-Myers is researching treatments for diseases including cancer, HIV and Alzheimer's, for which failure rates are higher, said company spokeswoman Tracy Furey.
'Highly Complex Diseases'
"Many of the diseases that fall into these categories are highly complex, which often results in higher failure rates," Furey said in an e-mailed statement.
The FDA has faced increased criticism from members of Congress for its oversight of drug safety since Merck withdrew its Vioxx painkiller in 2004 because of increased heart risks. Since the withdrawal, companies may be more reluctant to seek approval for some drugs when studies show there may be a safety problem, says Ira Loss, an analyst who tracks the FDA for Washington Analysis, a research firm.
Goldhammer, the industry spokesman, said there's no evidence the FDA has made new drug approval more difficult.
In addition to new molecular entities, the FDA in 2006 cleared four new biotechnology drugs, treatments derived from living organisms such as mammalian cells. Between 1999 and 2005, the number of annual biotech approvals has ranged from a low of two to a high of seven, according to data compiled by Loss, the Washington analyst.
This year, the number of pharmaceuticals approved by the FDA may increase after the Senate's confirmation in December of Andrew von Eschenbach as FDA commissioner, wrote James Kumpel, an analyst with Friedman Billings Ramsey in Arlington, Virginia. Von Eschenbach was acting chief for more than a year.
"We believe that a permanent FDA commissioner could be helpful in reducing some of the institution's risk aversion of the bureaucracy, although a Democratic Congress with more active oversight and exacting safety standards might offset the positive momentum in approvals," Kumpel wrote.
Pfizer and Merck each had two new drugs approved, the most of any company. New York-based Pfizer's Sutent attacks tumors in the stomach and kidney differently than other cancer drugs by depriving them of their blood supply. The drug, which had $115 million in sales last year through Oct. 1, is indicated for patients who were resistant or intolerant to Novartis AG's Gleevec, Pfizer said.
Januvia, from Whitehouse Station, New Jersey-based Merck, was approved Oct. 16. It is the first of a new class of drugs designed to improve the body's ability to lower high blood sugar. The once-a-day pill spurs the pancreas to produce more insulin and signals the liver to make less glucose.
Shares of Merck fell 42 cents to $44.02 in New York Exchange Composite Trading yesterday. They had declined 25 percent in the past five years before today. Pfizer's shares rose 49 cents, of 1.5 percent, to $26.29. That stock had fallen had fallen 34 percent over five years.
The shares of both companies fell more than the Standard & Poor's 500 Health Care Index, which dropped 18 percent in the past five years as of yesterday. The Standard and Poor's 500 Index has fallen 25.3 percent.