Most pharmaceutical and biotechnology companies already feel the pressure to reduce their R&D costs. A recent report showing a decline in the ROI for R&D among some of the world's biggest companies is not going to ease the pressure.
A report by Deloitte and Thomson Reuters shows that the average rate of return from R&D in 2012 among the world's top 12 pharmaceutical and biotechnology companies was 7.2 percent-down from 7.7 percent in 2011 and 10.5 percent in 2010.
The report ("Measuring the Return from Pharmaceutical Innovation 2012: Is R&D Earning Its Investment?") analyzes the top 12 publicly listed pharmaceutical and biotechnology companies with the highest R&D spending. Analysis was based on projected financial returns from their investment in the late-stage pipelines. All calculations were made in U.S. dollars. The report was released late last year.
Among the top 12 companies, there was an increase in the number of new drugs approved, but the total forecast sales revenues of new approvals fell. The group had 41 new drugs approved, with combined forecast revenues of $211 billion- compared with 32 new drugs with expected revenues of $309 billion from the previous year.
Other notable findings include:
Now more than ever, pharmaceutical and biotechnology companies have to find new ways to reduce R&D costs, including reducing cycle times. The report said cycle times can be shortened through more "focused governance, process improvement, or more selective disease area strategies."
Here are some of the report's recommendations for reducing cycle times.
While some companies persist in using paper or hybrid quality processes, now may be the best time to consider switching to a fully electronic quality management system. For example, "applying lean process improvement" and "use of digital technology" to accelerate clinical trial recruitment can be more readily achieved with the help of an automated system.
Sponsors that use CROs can collaborate more efficiently if they share an electronic platform, or if they can at least establish connectivity in the critical processes such as deviation and CAPA. The same platform can be used to manage the activities and performance of the CRO and clinical trial sites, as well as in conducting audits and assessing CRO performance.
The report's emphasis on reducing cycle times highlights how critical time is in containing overall R&D cost. For companies still using paper or hybrid systems, transitioning to a fully automated system is certainly worth looking into now more than ever.
Cindy Fazzi, a copywriter at MasterControl Inc.,writes about the life sciences industry and other regulated environments. Her two decades of experience as a news reporter, writer, and editor includes working for the Associated Press in Ohio and New York. She has a master's degree in journalism from Ohio State University.Note: The views expressed in this article are those of the author and do not necessarily represent those of his/her employer, GxP Lifeline, its editor or MasterControl, Inc.