The pipeline isn't dry because of the lack of good ideas. The pipeline is dry because we have a lot of good drugs for the major indications (that means no more blockbusters), the cost of getting a drug to market is in the billions, the FDA is very cautious (and this means $ in lost time, more, and longer tests and trials), reimbursement hurdles, government intervention, incomplete understanding of the biology and toxicology, etc. We still have tons of great ideas, but it is too costly for companies to pursue many of them relative to the risks and predicted returns.
Please forgive my momentary, internet hyperbole. The FDA is not insane. The FDA has become very cautious in many indications. Getting a drug through is very difficult. Aspirin would probably not get through this current regulatory environment. The biggest example of a cautious FDA is the amount of time a drug/product spends under regulatory review. In 1962, a drug spent less than one year from the investigational new drug application (IND) to approval. In 1998, it was over seven years. The number of clinical trials required has become greater and the number of patients required per trial is larger. All of this means money. The cost of bringing a drug to market is $1.3 billion. But consider that most companies have more misses than hits. If you count the costs of pursuing drugs which don't receive approval under the total costs, that amount goes up to around $4 billion (http://www.forbes.com/sites/matthewh...ing-new-drugs/
). Why would anyone spend that kind of money for their drug to not be prescribed because there are 20 generics for that same indication? That is why we are seeing so much focus on orphan diseases. That new drug kalydeco for cystic fibrosis-treatment costs $300,000 per year. For better or for worse, companies need to charge that much for orphan disease indications since the patient population is in the thousands and not millions.
Our understanding of human biology has never been greater, but is still incomplete. The reality is that all of this fantastic research is extremely expensive. Given the current reimbursement hurdles, including regulatory approval costs, government pricing limitations, prescribing habits, comparative efficacy concerns, etc., it is extremely challenging to be in the pharmaceutical business right now.