With new and novel medicines launched the last couple of years for diseases such as cancer, hepatitis C virus and multiple sclerosis, one would think that pharmaceutical pipelines are gradually improving. Think again.

A Bernstein Research report shows that, essentially, “Pipeline success rates across all phases of development have been slowly worsening or at best staying flat, depending on the phase (preclinical through registration).”

Drawing on data from consultancy KMR Group in areas like success rate across development phases and product-cycle metrics, the report by Bernstein analyst Tim Anderson illuminates what appear to be some potentially disturbing trends: Across all phases, success rates more often have declined, while it’s also taking longer for products to go from discovery to market.

One reason is that regulators and payers are prompting the pharma companies to take more risks.

“What you’re seeing is a function of [the industry] pursuing more novel drugs — pushing into disease areas with unmet medical need,” Anderson told McKnight’s sister publication MM&M in an exclusive interview.

“FDA is forcing folks, and payers are forcing folks, to get into these areas,” he said.

The drug industry’s two main problems the last decade have been lagging in research and development and facing the patent cliff, says Anderson. Recent R&D wins — like Boehringer Ingelheim’s Pradaxa and Johnson & Johnson’s Xarelto in the oral anticoagulant category; Novartis’ Gilenya for MS; and Bristol-Myers Squibb’s Yervoy and Genentech’s Zelboraf and Perjeta for various forms of cancer — suggest a productivity renaissance.

In fact, rates of success have deteriorated.

This can be seen most strikingly in Phase II, where win rates went from 34% for 2003-2007, to 25% for 2005-2009, to 22% in the 2007-2011 span.

 For candidates in Phase III, win rates have gone from 70% to 67% to 65% for the periods 2003-2007, 2005-2009 and 2007-2011, respectively.