The R&D Challenge

Over the last 10 years pharmaceutical R&D expenditure has increased dramatically, whilst new medicine approvals have decreased and the mix of product approvals has shifted towards specialities, many with lower commercial potential. This has led to a “productivity drought” in the sector. Intense attempts by the industry to address this have led to an increase in the number of new drugs emerging from Phase 1 trials and many company pipelines look promising. Despite this, the attrition rate is higher now than it was 10 years ago meaning that the probability of success is lower than it was previously.

The R&D challenge is a multi-faceted problem that cannot be reduced to a single explanatory variable. However, the following five contributory factors have been particularly significant:

  • Industrialisation of the R&D process
  • Duplication of efforts
  • Risk aversion
  • Consolidation of the industry
  • Regulatory requirements


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