Does the high cost of drug development reduce the pipeline of new drugs coming to market?

Large pharmaceutical manufacturers contend that high research and development (R&D) costs, estimated to be over billion dollars per drug, must be recouped through market returns. And since roughly 90% of drug candidates fail during clinical trials, companies argue that financial pressure restricts their ability to fund speculative or less-lucrative categories like rare infectious diseases. Studies by organizations like the USC Schaeffer Center and projections cited by the National Center for Biotechnology Information suggest that reduced expected revenues or compressed margins can lead larger firms to cut back on R&D or abandon high-risk candidates in early phases (Phase I and Phase II). Skyrocketing clinical trial expenses, intensified by fierce competition for patient enrollment and stricter regulatory requirements, push companies to favor incremental variations of proven biological pathways rather than high-risk, ground-breaking cures. The era of blockbuster drugs, like the statins, appears to be over.