Blame it on Bush? There were just 38 NDA approvals through July, down 31 percent year-over-year from last year’s 55 and 16 percent below the 10-year average of 45, writes Jim Kumpel, a healthcare analyst at Friedman Billings Ramsey, in an investor note this morning. And the 7 new molecular entities approved through July is down 30 percent year-over-year, marking a 10-year low and 50 percent below July 2004.

He points out that, during the first 79 months of the Bush administration, drug approvals have significantly lagged the averages logged under the Clinton administration. Under Bush, the FDA has averaged 80.8 NDA and 20.7 NME approvals per year, both down from the Clinton era’s average of 92.1 NDA and 32.4 NME approvals annually. It’s also true that, other than Mark McClellan’s tenure, the FDA has been managed by underqualified caretakers during Bush’s reign.

“The dramatic slowdown in new drug approvals further magnifies the importance of Congress reauthorizing the prescription drug user fee act (PDUFA), which will likely serve to heighten further safety standards. Companies that depend on new drug approvals - whether large pharmaceutical manufacturers, contract sales organizations, or new drug launch consultants - are clearly feeling the pain in 2007,” he writes. To see a chart, keep reading….

“We view NME approval trends as a more critical metric than overall new drug approval trends because they represent novel compounds carving out entirely new pharmaceutical niches. These are the compounds that require the most resources to educate physicians, consumers, and payers as to efficacy and safety.”

The seven NME approvals through the end of July are meaningfully below the 10 NMEs approved in the comparable year-ago period and a 10-year average of 12. Moreover, this is the first July with zero NME approvals in more than 10-years. (NMEs are the red bar and NDAs are the blue bar. To see a slightly larger version, click on the chart).

When the level of drug approvals declines and/or the approval cycle extends, this creates bottlenecks throughout the pharmaceutical R&D channel, causing the deferring, delaying, or dropping of certain projects.