There are more than 950 compounds in the clinical development pipelines of pharmaceutical companies operating in the UK, a new survey by the Association of the British Pharmaceutical Industry has found.

The 47 companies surveyed had a total of 951 compounds in Phase I, II or III clinical trials in 2006, compared with the 561 candidates in development when the ABPI conducted its last such survey, published in 2002.

Last year’s tally included 362 compounds in Phase 1 trials, 349 in Phase II and 240 in Phase III. There were also 137 medicines in post-marketing or Phase IV trials. More compounds (170) were being developed for cancer than any other therapeutic category, followed by cardiovascular diseases (109), mental disorders (62), diseases of the endocrine system (59), respiratory diseases (53) and dementia (20).

The figures come from a new ABPI publication, A-Z of Medicines Research, which notes that the pharmaceutical industry accounted for more than 60% of R&D investment in UK medical research in 2004/05. Annual surveys by the Office of National Statistics show that total R&D expenditure by the pharmaceutical industry in the UK, including capital spend, rose from £475 million in 1984 to £3,308 million in 2005.

But this kind of commitment should not be taken for granted, the association warned. With reference to the Office of Fair Trading’s recent proposals for reform of the Pharmaceutical Price Regulation Scheme through a shift to value-based pricing in the NHS, ABPI Director General Dr Richard Barker stressed that research “must be nurtured. Far more medicines are developed in the UK than its market scale would imply, and among the reasons for this are the stability offered by a five-year agreement on pricing coupled with a flexible pricing structure."

He also underlined the importance of incremental development in making judgements about the value of pharmaceutical R&D. “It would be incorrect and unrealistic to assume that, by some miraculous process, we jump the various stages of development to create the ‘perfect’ medicine for a disease,” Barker commented. “The ‘first of kind’ medicine is rarely the ‘best of kind’ that offers patients the best treatment.”

The Department of Trade and Industry and the Department of Health have 120 days to consider and respond to the OFT’s recommendations, which went out on 20 February. One argument the OFT has challenged is that the PPRS acts as a vehicle for industrial policy by drawing R&D investment to the UK. The R&D allowances under the scheme apply no matter where these investments are made, and offering more specific incentives would be contrary to European Union law, the OFT says.

PPRS encourages R&D

That may be so, counters ABPI spokesman Richard Ley, but the PPRS still sends out a “hugely strong signal” that the UK welcomes pharmaceutical R&D investment. To have a pricing system that ignored thus would be “extremely foolish”, particularly in the face of an “extraordinarily competitive” environment for research and development expenditure worldwide.

The ABPI is ready to discuss changes to some areas of the PPRS, but there are certain “fundamental principles” – such as the stability provided by a five-year agreement with a degree of pricing flexibility at launch – that should be left alone, Ley says. While the NHS has every right to expect a fair and reasonable price for medicines, so too does industry, he contends.

Pharmaceutical pricing is a complicated issue that cannot be resolved by “rushing in with a ready-made solution," Ley cautions. The industry is particularly alarmed about the OFT’s proposals for including generics among the comparators for determining cost-effectiveness in pricing decisions and for reimbursing off-patent brands with generic equivalents at no more than 25% above the generic price. The wider impact of reference pricing would be to drag down all drug prices, Ley argues.

Nor does he agree that industry has been slow, both in its pricing strategies and development priorities, to pick up on the emergence of new structures, decision-makers and cost-effectiveness criteria in the NHS.

Companies are “very much responding” to these factors, he says, although there are still issues with the assessment mechanisms applied by the National Institute for Health and Clinical Excellence and the Scottish Medicines Consortium. Industry is uneasy about the suggested involvement of these bodies in setting value-based prices under a revised PPRS or – as the Cooksey review has recommended – in shaping clinical development targets at an earlier stage.

These worries aside, the general drift of government policy on galvanising R&D investment in the UK, as expressed through collaborative initiatives such as the Ministerial Industry Strategy Group, is “absolutely” in the right direction, Ley believes. The existence of a forum through which industry can “talk to government in the round” – and not just the DH but the DTI and other interested parties such as the Department for Education and Skills – is “the envy of many other countries”, he comments.