First phase is the discovery and lead optimisation phase. Here are more than 100000 compounds tested on how they react on a sertain compound and where the best reaction is.
Second phase is the non-clinical development phase. Here only 100 compounds are left and this is stil not done with animals.
Third phase is the clinical development. This is for only 10 compounds left, takes the most time and especially a lot of money. A research can take 10 years and 1000 milling dollars.

- there are a lot of costs
- decline in productivity, the best/easiest drugs are already on the market, so it is way harder to find a drug that works. Also hard chronic diseases are researched.
- there are cuts and limits by the gouvernment and health insurers, they think pharma askes to much, but they need it.
-  There is also competition between companies

However:
- world- wide demand for new drugs is still rising
- many unment medical needs
- more aged persons with buying power and demand for adequate medical care

- it is a pipeline model, there is a lot of selection
- continuous selection and attrition process
- validated  drug targets are essential
- so are the compound 'libraries'
- alternative pathways are increasing (for example by buying in)