Seize the digital momentum
Measuring the return from pharmaceutical innovation 2022
Our series of annual reports on Measuring the return from pharmaceutical innovation has provided insights into the state of biopharma R&D since 2010. We have expanded the analysis over time, and our data set now covers the top 20 pharma companies by R&D spend. This year’s analysis demonstrates the big change we anticipated in our 2021 report Nurturing growth has yet to be realized.
Our latest report looks at the current state of R&D returns for 20 leading biopharma
companies as well as their pipeline composition and sources of innovation. What is clear
is that revitalizing today's clinical trials for a healthier tomorrow entails thoughtful
digitalization of clinical trial processes to create a seamless experience for patients
and staff that could drastically improve trial efficiency, enhance scientific rigor, and
expand health equity.
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DownloadKey findings
Projected returns from innovation have declined this year
Last year we witnessed a notable rise in IRR to 6.8%, driven by forecasted high-value COVID-19 assets (including vaccines and treatments) and one high-value late-stage neurological asset that has subsequently underperformed post-launch and is no longer seeking approval beyond the FDA. As some of these assets have moved into the commercial portfolio, the IRR has declined to 1.2%. This is driven by the successful approvals of high-value forecasted assets that have been commercialized and therefore left the scope of our analysis.
The average cost to develop an asset from discovery to launch has
increased while peak sales forecasts have declined
The average cost to develop an asset in our 2022 analysis was $2.2 billion, an increase of $298 million from 2021. Additionally, average forecast peak sales per pipeline asset for the combined cohort decreased from $500 million in 2021 to $389 million in 2022. However, the 2022 value is almost identical to the forecast peak sales of 2020. This decline in average forecast peak sale per asset is driven by the increasing length of cycle times and the number of high-value forecasted assets that have left our pipeline this year.


There has been a large uptick in the proportion of forecast revenue from self-originated assets
After witnessing a continuous decline for five years, there has been a significant increase in the proportion of forecast revenue of self-originated assets from 29% in 2021 to 51% in 2022. Therefore, more than half of the forecast revenue from the late-stage pipeline is now being generated in-house. This notable increase in the share of self-originated assets can be partly attributed to the addition of five new blockbuster assets, including a forecasted high-value COVID-19 therapeutic.
Clinical trials of tomorrow will be tailored to the convenience, medical, and
behavioral needs of diverse patient populations affected by diseases
With trial decentralization as the new norm, the virtual clinical trial of the future
will place a low burden on patients, be data-rich due to the high frequency of
measurement, and reduce the environmental impact due to decreased travel, fewer research
centers and minimized patient non-adherence and dropouts. Such clinical trials will
fundamentally transform drug development and cut development timelines through the
implementation of digital innovations. These investments will enable companies to
innovate and create a seamless clinical trial experience for patients and digitalize
workflows for investigators and trial staff.

Seize the digital momentum
Read the full report to find out more about the current state of R&D returns in the biopharma industry

Methodology
Read more about how our R&D ROI report is crafted by reading our methodology
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Since 2010, Deloitte has been tracking the returns on R&D investment of the largest biopharma companies. Let us know if you have any questions or would be interested in receiving a more detailed analysis of your company's 2022 performance (available for select cohort companies).
Key contacts
Kevin Dondarski
Principal, Deloitte Consulting LLP