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A new future for R&D?
Measuring the return from pharmaceutical innovation 2017
The pharmaceutical industry continues to face an extremely challenging research and development (R&D) environment and has yet to turn a corner in terms of its R&D value proposition. Despite this, our report presents an optimistic road ahead for R&D and business leaders and explores the emerging technologies that have the potential to dramatically transform the productivity and efficiency by which drugs are discovered, developed, and brought to patients.
- Key findings for top 12 large-cap biopharma
- View the infographic
- Emerging technologies offer promise
- Other key findings
- Access prior year's reports
The eighth annual pharmaceutical innovation study, a collaboration between Deloitte’s US & UK Centers for Health Solutions, looks at the state of R&D in the biopharma industry and estimates the return on investment that 12 large-cap biopharma companies may expect to achieve. The report also includes an extension cohort of four mid-tier biopharma companies.
Key findings for top 12 large-cap biopharma
- R&D returns have declined to 3.2 percent, down from 10.1 percent in 2010
- It now costs these companies almost $2bn to bring a drug to market
- Projected peak sales per asset decreased by more than half between 2010 and 2016 but have increased by 18 percent in 2017
- This year’s uptick in costs and sales per asset is due to the drop in the number of assets in late-stage pipelines—from 189 in 2016 down to 159 in 2017.
Emerging technology and new drug development paradigms offer promise
Biopharma companies are just starting to experiment with emerging technologies, and early adopters will reap the rewards of a much more efficient R&D process, improving both the quality of assets and the time and cost it takes to get them to market. For example:
- Artificial intelligence: can help analyze large data sets from sources such as clinical trials, health records, genetic profiles and pre-clinical studies; within this data, it can recognize patterns and trends and develop hypotheses at a much faster rate than researchers alone. AI can also help improve study design and decision making in clinical trials in recruitment and enrollment, adherence, and real-time clinical trial monitoring.
- Real-world evidence: can help revolutionize the way biopharma companies evaluate new therapies for safety and effectiveness. RWE can also help reduce the time it takes to recruit patients, identify subpopulations and conduct research. Deloitte’s 2017 RWE benchmarking study found that biopharma companies are starting to invest in RWE capabilities and are exploring a number of use cases.
- Robotic and cognitive automation: can automate work and streamline resources across the clinical trial value chain. RCA could help expedite clinical trial site selection, support site initiation, and improve site monitoring. Natural Language Generation (NLG) can expedite the creation of dossier submissions by automating the safety and efficacy sections.
- Digital technologies such as social media, mHealth, wearables, connected devices, and telemedicine: can transform how companies engage patients in clinical trials, enabling expedited enrollment, adherence, retention and improvements in study design and data quality
We believe that applying these emerging technologies can transform how drugs are discovered, developed and brought to patients. Similarly, innovation in collaborative, patient-centric drug development models that are being promoted by pharma companies, regulators and patient groups, have the ability to transform the industry and improve productivity significantly.
Other key findings
- Smaller firms outperform larger peers: Since 2015, in addition to the 12 companies included in the original cohort, four mid-tier biopharma companies have also been added to the study. These continue to out-perform the original pharma cohort, with projected returns of 11.9 percent in 2017 (up from 9.9 percent in 2016), but are still below the high of 17.7 percent set in 2014.
- Rise of cancer therapies: From 2010-17, the percentage of forecast late-stage pipeline revenue from oncology for the top 12 companies has increased significantly, from 18 percent in 2010 to 37 percent in 2017. High levels of unmet medical need and higher potential returns are attracting companies.
- Examples of innovation demonstrate pharma’s resilience: Despite many challenges with biopharma R&D, there are numerous examples of innovation that demonstrate pharma’s resilience and optimism about the future – from the approval of numerous immunotherapies to the first ever approvals of chimeric antigen receptor T cell (CAR-T) therapies this year.