Despite striking advances in the biomedical sciences, the flow of new drugs has slowed to a trickle, impairing therapeutic advances as well as the commercial success of drug companies. Reduced productivity in the drug industry is caused mainly by corporate policies that discourage innovation. This is compounded by various consequences of mega-mergers, the obsession for blockbuster drugs, the shift of control of research from scientists to marketers, the need for fast sales growth, and the discontinuation of development compounds for nontechnical reasons. Lessons from the past indicate that these problems can be overcome, and herein, new and improved directions for drug discovery are suggested.