The numbers are in, and it looks like 2009 produced a bumper crop of biopharmaceuticals. The US Food and Drug Administration approved a record 16 new biopharmaceutical entities last year, as opposed to 10 in 2008, according to a study by the Biotechnology Information Institute. Seven recombinant-protein or antibody products were approved last year, continuing an upward trend for these molecules. Great news, right?

Not so fast. The study points out that only five approvals originated at US-based companies. This number decreased from seven in 2008. Johnson and Johnson (New Brunswick, NJ) and Genzyme (Cambridge, MA) were among the lucky few US companies to have products approved in 2009. The record number of FDA approvals is mainly grounds for celebration in Europe.

What gives? A new study published in the Journal of the American Medical Association reveals a plausible reason: the growth rate of research funding in the US has slowed. If you adjust for inflation, the rate may even have fallen. Between 1994 and 2003, which were boom years for research, the growth rate in funding was 7.8%. From 2003 to 2007, the growth rate was only 3.4%.

The industry’s spending priorities could be problematic. More and more, companies are dedicating most of their money to late-stage clinical trials and leaving small companies to be liaisons between academic research and the industry. In this economic climate, sponsors are only likely to work with small companies that can prove that they have surefire molecules. Given this pressure and their limited resources, these small go-between firms are less likely to spend money on innovative research that has a high risk of failure.

If the US biopharmaceutical industry wants to substantiate its claim to be the worldwide leader in innovation, I suggest that it adjust its budget to favor research over clinical trials. Congress may soon give the industry 12 years of data exclusivity for new biologics. The Biotechnology Industry Organization (BIO) has long demanded this exclusivity, which it calls an incentive for innovation. If BIO gets its prize, its members should pony up and put their money where their molecules are.