Please login to the form below

Not currently logged in

Pharma R&D productivity still declining, says Deloitte

Survey of top 12 drugmakers reveals average price of bringing drug to market increases to over $1bn with increased collaboration and transparency needed to cut costs

The pharmaceutical sector has been struggling with "very real productivity challenges" in its R&D operations, although there are signs that the industry is adapting its processes to improve matters, according to a Deloitte survey of the top 12 drugmakers.

A major advance is a greater willingness by pharma to share information and enter into innovative collaborations, breaking down the "walls of secrecy" in the industry, according to the study author Julian Remnant.

This year's Deloitte survey indicates that pharma companies' internal rate of return on investment dropped to 8.4 per cent from 11.8 per cent last year, with the average cost of bringing a drug to market growing by a quarter to over $1bn.

The average number of late-stage compounds in development also declined from 23 to 18 per company, according to the survey, which was carried out with the help of Thomson Reuters.

On the plus side, pharma companies are getting better at managing risk in their late-stage pipelines, with two thirds of those surveyed "realising more value from product commercialisation than has been lost from late stage product failures," according to Deloitte.

Widespread cost-cutting in non-R&D areas is also freeing up money that could be invested back into pharma company pipelines, although a study published earlier this year indicated that drugmakers actually reduced their R&D investment from $70bn in 2009 to $68bn in 2010, with the spend per R&D employee dropping by 10 per cent.

There seems to be an increased willingness among drugmakers to collaborate in new ways, however, such as the formation of alliances and joint ventures to pool research knowledge in particular disease area.

Some companies are also talking to payers at the early stages of drug development to increase the chances that a new drug meets criteria for reimbursement in increasingly cash-strapped healthcare systems.

"Having said this, the pharmaceutical R&D sector can do more to work together," said Remnant, noting that it would be desirable for companies to pool their resources in non-competitive areas of R&D to cut costs, remove duplication of work and make the operations of service providers more efficient.

"Sharing knowledge on the science behind failed molecules and studies will help improve success rates, and ultimately bring down the cost to develop new medicines."

21st November 2011


Featured jobs

Subscribe to our email news alerts


Add my company
Cello Health Insight

Cello Health Insight is the global market research arm of Cello Health. With 35 years’ sector experience, we specialise in...

Latest intelligence

Is China ready for a pharmaceutical gold rush?
Some describe doing business in China as akin to the 1990s internet boom – so how stable is its future?...
AstraZeneca’s oncology renaissance
Susan Galbraith played a key role in restoring AstraZeneca’s place in cancer drug development – she talks about the future of oncology and why there’s more to be done to...
Navigating the antibiotic resistance crisis
Blue Latitude Health speaks to Tara DeBoer, PhD, Postdoctoral Researcher and CEO of BioAmp Diagnostics to explore the antimicrobial resistance crisis, and learn how a simple tool could support physicians...