Drug-development pipelines have shrunk; fewer new products are being approved for market; and the prospect of significant declines in revenues due to the looming "patent cliff" is prompting pharmaceutical companies to scale back research and development (R&D). Pfizer rocked the industry in February by announcing a major cutback in R&D spending, including plans to shutter its long-time research facility in Sandwich, United Kingdom, and to reduce its Groton, Connecticut, research facility. As part of a move to cut its $9-billion R&D budget to some $6-7 billion by 2012, Pfizer is moving antibacterial research from Groton to Shanghai, China, and will use its Cambridge, Massachusetts, research operation to form more links with small biotechnology firms in the area.
The crisis in the pharmaceutical industry is generating a serious search for new business models. Manufacturers are looking to partner more with small biotechnology firms and academic research institutes, to shift research and production operations overseas, and to streamline operations and reduce waste wherever possible. The National Institutes of Health (NIH) proposes to ramp up support for translational medicine that will shepherd basic research through the R&D "valley of death" to yield new therapies. Patient advocacy groups are consulting with and providing funding for public and private therapy development programs. America's position as the world leader in biomedical R&D is "under siege today," and facing its biggest threat in 65 years, commented former Congressman John Porter, at a forum in March 2011, sponsored by ResearchAmerica. "Is America going to put progress on hold?" he asked in calling for decision-makers to consider the importance of science and innovation in making spending decisions. These trends are shaping many aspects of biopharmaceutical development, production, and marketing.