Abstract
New drugs serving unmet medical needs are one of the key value drivers of research-based pharmaceutical companies. The efficiency of research and development (R&D), defined as the successful approval and launch of new medicines (output) in the rate of the monetary investments required for R&D (input), has declined since decades. We aimed to identify, analyze and describe the factors that impact the R&D efficiency. Based on publicly available information, we reviewed the R&D models of major research-based pharmaceutical companies and analyzed the key challenges and success factors of a sustainable R&D output. We calculated that the R&D efficiencies of major research-based pharmaceutical companies were in the range of USD 3.2–32.3 billion (2006–2014). As these numbers challenge the model of an innovation-driven pharmaceutical industry, we analyzed the concepts that companies are following to increase their R&D efficiencies: (A) Activities to reduce portfolio and project risk, (B) activities to reduce R&D costs, and (C) activities to increase the innovation potential. While category A comprises measures such as portfolio management and licensing, measures grouped in category B are outsourcing and risk-sharing in late-stage development. Companies made diverse steps to increase their innovation potential and open innovation, exemplified by open source, innovation centers, or crowdsourcing, plays a key role in doing so. In conclusion, research-based pharmaceutical companies need to be aware of the key factors, which impact the rate of innovation, R&D cost and probability of success. Depending on their company strategy and their R&D set-up they can opt for one of the following open innovators: knowledge creator, knowledge integrator or knowledge leverager.
Highlights
The importance of research and development (R&D) for the pharmaceutical industry is evidenced by the cumulative R&D expenditure in this sector as a whole and on the individual company level
Measured by the number of new molecular entities (NMEs) approved by the US Food and Drug Administration (FDA), most of the top pharmaceutical companies did not launch enough new drugs in the past years to achieve the reported 2–3 NMEs/year/company which would be necessary to Schuhmacher et al J Transl Med (2016) 14:105 achieve the growth objectives based on product innovation [3,4,5,6,7,8,9]
As for example, GSK launched in 2007 its Center of Excellence for External Drug Discovery (CEEDD), an externally focused R&D center that facilitates drug discovery alliances up to clinical proof-of-concept (PoC) with external partners working across all therapeutic areas
Summary
The importance of research and development (R&D) for the pharmaceutical industry is evidenced by the cumulative R&D expenditure in this sector as a whole and on the individual company level. As many pharmaceutical companies follow comparable strategies as to therapeutic areas, target diseases, biologic mechanisms and drug targets, the long R&D timelines increase the risk of competition, reduce the chance to be first-in-market, cut the market potential and the commercial success of a drug candidate. Todays output of some research-based pharmaceutical companies is remarkable, such as the 13 NMEs launched by Novartis in the period of 2006–2014, contrasting the output figures per company to their total R&D expenditure of up to USD 80 billion (2006–2014) highlights the real challenge the companies are facing (see Fig. 1) Such analyses comprise inherent inaccuracies, such as the input parameter does not match time-wise with the output correctly, it still shows the dilemma of the pharmaceutical industry.
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