“How to Improve R&D Productivity: the Pharmaceutical Industry’s Grand Challenge”, 2010-02-19 (; backlinks; similar):
The biopharmaceutical industry is facing unprecedented challenges to its fundamental business model and currently cannot sustain sufficient innovation to replace its products and revenues lost due to patent expirations.
The number of truly innovative new medicines approved by regulatory agencies such as the US Food and Drug Administration has declined substantially despite continued increases in R&D spending, raising the current cost of each new molecular entity (NME) to ~US$2.57$1.82010 billion
Declining R&D productivity is arguably the most important challenge the industry faces and thus improving R&D productivity is its most important priority.
A detailed analysis of the key elements that determine overall R&D productivity and the cost to successfully develop an NME reveals exactly where (and to what degree) R&D productivity can (and must) be improved.
Reducing late-stage (Phase II and III) attrition rates and cycle times during drug development are among the key requirements for improving R&D productivity.
To achieve the necessary increase in R&D productivity, R&D investments, both financial and intellectual, must be focused on the ‘sweet spot’ of drug discovery and early clinical development, from target selection to clinical proof-of-concept.
The transformation from a traditional biopharmaceutical FIPCo (fully integrated pharmaceutical company) to a FIPNet (fully integrated pharmaceutical network) should allow a given R&D organization to ‘play bigger than its size’ and to more affordably fund the necessary number and quality of pipeline assets.
The pharmaceutical industry is under growing pressure from a range of environmental issues, including major losses of revenue owing to patent expirations, increasingly cost-constrained healthcare systems and more demanding regulatory requirements. In our view, the key to tackling the challenges such issues pose to both the future viability of the pharmaceutical industry and advances in healthcare is to substantially increase the number and quality of innovative, cost-effective new medicines, without incurring unsustainable R&D costs. However, it is widely acknowledged that trends in industry R&D productivity have been moving in the opposite direction for a number of years.
Here, we present a detailed analysis based on comprehensive, recent, industry-wide data to identify the relative contributions of each of the steps in the drug discovery and development process to overall R&D productivity. We then propose specific strategies that could have the most substantial impact in improving R&D productivity.