Here's one post (of many) reporting on the results of a new Deloitte study on the R&D productivity of the world's 12 largest BIG pharma companies. As would be expected if you have been paying attention to talk of patent cliffs and dry pipelines, the results are not too pretty.
Those Returns On R&D Are Falling Fast // Pharmalot.
Let me hit you with the Reader's Digest version of Deloitte's findings from last year:
- The average cost of bringing a drug to market rose by 25% to more than $1 B up from $830 M (note these figures are hotly disputed by others as "grossly inflated" and several posts on this site discuss the controversy)
- The number of late stage drugs in development dropped from 23 to 18 (22% decrease) per company on average
- Ten of twelve firms saw R&D ROI decline resulting in a group drop from 11.8% return to only 8.4%
- Two-thirds of the top 12 did realize "more value" from product commercialization than they lost in late stage failures (Thank God for minor blessings)
- Non-R&D costs declined across the top 12 to free up cash to go back into R&D
This analysis should be viewed as a snapshot and may or may not reflect a trend. Deloitee stated that more improvments need to be made, and suggested that "more collaboration" occur between companies to "pool" disease knowledge. In particular, sharing knowledge on failed molecules and approaches could be very helpful to industry learning. Drugmakers may also share "non-competitive" areas of R&D to reduce costs for all. See more in PharmaGossip and Fierce Biotech.
Finally, In the Pipeline had an interesting post the same day talking about "what if" the principles espoused in Moneyball could be applied to the Big Pharma pipelines? It's an interesting thought and one I'd like to see undertaken (at least do the math and assess predictive value as theoretical exercise). Anyone got Bill James' phone number?
Posted by Bruce Lehr Nov 29th 2011
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