Don't bother mentioning "the genomic revolution" these days in the halls of Pfizer's sprawling research and development facility in Groton, CT. Yes, the company's scientists will acknowledge, the latest techniques in genomics and proteomics are interesting and occasionally useful; just don't expect them to revolutionize drug discovery anytime soon. And as Pfizer's R&D executives are equally hasty to point out, the new technologies are expensive-very expensive.

The impatience of Pfizer's researchers with the hype surrounding genomics is not surprising. After a decade of promises and millions of dollars of investments in high-powered new genomic tools, pharmaceutical companies are mired in their most prolonged and painful dry spell in years. Despite skyrocketing R&D spending, which reached $32 billion in 2002, the U.S. industry's output of new drugs has been spiraling downward since 1996. In 2002, the U.S. Food and Drug Administration approved only 17 "new molecular entities"-the agency's jargon for drugs based on a novel active ingredient-the lowest number since 1983, when U.S. drug companies spent only about $3 billion on research and development. (Through the end of October 2003, the FDA had approved 18 new molecular entities.) "There is a research productivity problem, no doubt about it, and it's getting worse," says biologist Anthony Sinskey, codirector of MIT's Program on the Pharmaceutical Industry.