Global spending on drug R&D fell for the first time ever in 2010, with the decline set to continue through 2011.
Expenditure on new medicine discovery and development equated to approximately $68bn in 2010, according to Thomson Reuters.
Although R&D laboratories have been immune to cost cutting in the past, recent cutbacks seem to have escalated. Pfizer now plans to cut 25% from its R&D budget over the next two years.
Declines in funding has impacted on results, with new molecular entities falling from the 26 recorded in 2009 to 21 last year, with just one third of those developed by major pharmaceutical firms.