As others have pointed out, antibiotics are still being investigated but it is true that there was a decline in that field of research in the late 70s through the early 90s. The way in which we find new varieties has also largely changed. In the past the process was fundamentally simple, you basically used a culture plate as a proverbial boxing ring in which different microbes (mostly filamentous soil bacteria or moulds) would compete with representative pathogens. The vast majority of antibiotics used today are molecules that were discovered by this method between WWII and the mid 60s (or semisynthetic derivatives thereof). This method has become much less productive and far more complex methods are being employed which partly explains why less drugs have come to market. A lot of the preliminary research is now done by smaller biotech firms, university and other research labs which may sell the technology on as opposed to the past where it would have been carried out by the pharmaceutical giants first hand. There is some truth in the claim that such drugs are not profitable, for example, a potent antibiotic may cure cystitis or gonorrhoea in a single dose. Moreover, new antibiotics often don't get much use immediately after being launched as microbiologists (rightly) encourage doctors to prescribe them only for infections already resistant to standard drugs - this combined with a finite patent is an issue. For diseases largely confined to the developing world there is little monetary incentive to find drugs, for instance, the drug eflornithine was known to be effective against african sleeping sickness but was only pursued when it was later found to be useful as a hair removal treatment (profitable).
