The pharmaceutical industry is heavily dependent on an aging portfolio of drugs for the bulk of its revenues as these companies have increasingly struggled to get new products through clinical trials and to market. The oldest drugs generate on average 44 percent of the revenue for top pharma company sales while drugs approved in the last five years declined to less than 7 percent from 8 percent in 2008, according to CMR International’s 2010 Pharmaceutical R&D Factbook.

One reason the industry is having difficulties generating revenue from new products is the high rate of attrition in its pipeline. The termination of experimental drugs in late-stage clinical trials between 2007 and 2009 was twice the rate of the period from 2004 to 2006.

In addition, less than 1 in 10 drugs reaching 'first toxicity dose' can now expect to be successfully launched, the Factbook reports.

Adding to the industry’s productivity woes are financial pressures that have led to pharmaceutical companies cutting their R&D budgets. R&D spending fell .3 percent in 2009 from 6.6 percent in 2008. Though it reflects a small drop, it stands in contrast to growth rate that’s been traditionally seen within the industry.

One encouraging sign was that the industry did see an uptick in the approval of new molecular entities–26 launched in 2009 globally compared to a 20-year low of 21 in 2008. Nevertheless, concern remains over whether the industry can change direction on its decade long slump in R&D.

“The latest data shows that poor productivity in 2009 continued to be exasperated by the low success rate for drugs in late stage development and a decline in sales from new drugs launched within the last 5 years,” said Hans Poulsen, head of consulting at CMR International. “The increase in NME launches compared with 2008 offers some positive news however, with data indicating a continued drop in overall success rates, it remains to be seen if the industry can reverse a 10 year trend in declining R&D output.”