Updated on 18 December 2015
The study focuses on a longer-term view of R&D returns
Singapore: While the Research and Development (R&D) divisions of 12 leading pharmaceutical companies have progressed 306 assets into late-stage pipelines since 2010, with projected lifetime returns of over $1.41 trillion, these returns are continuing to decline in percentage terms, according to a study produced by Deloitte in collaboration with research and consulting firm GlobalData.
The study, published by the Deloitte Centre for Health Solutions, states that the original cohort has launched 186 products since 2010, with a projected lifetime value of just under $1.26 trillion. However, the collective R&D returns for this cohort have declined markedly, from 10.1 percent in 2010 to just 4.2 percent in 2015, while the average cost of asset development has risen by a third.
The study focuses on a longer-term view of R&D returns, as this reduces the volatility of static measures, which can be skewed by particularly high or low revenue expectations. As assets can take approximately 15 years to progress from discovery to launch, and revenue forecasts can change substantially as they progress through late-stage development, a longer-term view provides a more robust analysis of an organization's likely R&D returns.
Mr Jim Coutcher, Global Head of Healthcare, GlobalData says that across the 16 companies included in the report, there has been an increasing focus on specialized therapeutics.
Mr Coutcher commented, "The pharmaceutical industry's R&D focus has been shifting towards specialty therapy areas, given the high levels of patient unmet need and the identification of discrete patient populations.