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Now the good news: Last year may have been a low-water mark. Already new drug approvals this year are slightly up over last year's low. Six drugs were approved by May 15, putting 2003 two weeks ahead of 2002. Several more important approvals could come in June, which was a completely dry month last year. And the numbers are more impressive when protein-based drugs such as Johnson & Johnson's (nyse: JNJ - news - people ) Procrit for anemia and Amgen's (nasdaq: AMGN - news - people ) Neulasta for chemotherapy-related infections are thrown in (until recently such medicines were handled by a different part of the FDA). In 2002, nine such drugs were approved--up from eight the previous year.

Even better, some of the industry's biggest names think that their research efforts may be budding. GlaxoSmithKline (nyse: GSK - news - people ) Chief Executive Jean-Pierre Garnier says his company--long used as evidence that mergers don't bring more productive science--is finally starting to reap rewards from its laboratories. Pfizer (nyse: PFE - news - people ) Chief Executive Henry McKinnell thinks the industry's research laboratories have turned the corner, promising that, "The number of new drugs approved is going to zoom up this decade."

Pfizer plans on filing 20 new drugs with regulators over the next five years, equaling its output during the early-90s research boom. Among them: treatments for asthma, sexual dysfunction, and heart disease. Glaxo, meanwhile, has tried to revitalize its research laboratories by separating them into six Centers for Excellence in Drug Development that compete against one another like individual biotechs. The result: more than 45 compounds in early clinical trials, up from 35 last year. The London-based giant will give an overview of its most promising research later this year.

Already, Glaxo is raising hopes for a new kind of targeted cancer therapy. Drugs like AstraZeneca's (nyse: AZN - news - people ) Iressa and ImClone's (nasdaq: IMCL - news - people ) Erbitux work by picking a single molecule and disabling it. Glaxo's new drug hits two such targets--in theory increasing efficacy.

Other one-time research sad sacks have bought or invented their own lines of new drugs. Roche has new treatments for urinary incontinence, osteoporosis, and rheumatoid arthritis. Bristol-Myers Squibb (nyse: BMY - news - people ), which spent years between drug approvals, last year had a promising new schizophrenia medicine approved and may get an AIDS drug onto the market this year. However, the company still gets most of its drugs through licensing, not through its own science.

But the new drugs have not come cheaply. In 1987, drug companies spent $231 million for each new drug developed. Now, that number is close to $900 million per drug. A decade ago, pharmaceutical companies' combined spending on research and development was a little more than $10 billion. Now, they spend $30 billion. Pfizer, the largest drug firm in the world, spends $5 billion by itself. Glaxo, the second-biggest, spent nearly $4 billion on R&D last year. The $130 billion poured into drug R&D between 1996 and 2001 was more than the industry spent in the previous 25 years.

Those stratospheric price tags make blockbusters all the more important, and one worry is that some of the new drugs may be only moderate hits. For instance, analysts expect Merck's (nyse: MRK - news - people ) anti-nausea drug Emend to garner well less than $500 million in sales--a market many big drug companies might have walked away from. (It is possible the same compound could someday become a blockbuster depression treatment.) What the drug industry needs is another big hit like the statins--a class of cholesterol pills that alone accounted for more than $12 billion in U.S. sales, most of it to Merck, Pfizer and Bristol.

But finding hits first requires getting new medicines approved. And an end to the research drought can only be good for patients and drug companies, and the economy as a whole.