According to a new report by Deloitte, R&D return on investments generated from the pharmaceutical industry’s annual investment in new product innovation have continued to decline. The annual projected R&D returns were 10.1% in 2010; in 2015, the returns were down to 4.2%. Since 2010, Deloitte’s original cohort of 12 companies has launched 186 products with estimated revenues of $1,258 billion. The R&D departments of these companies have progressed 306 assets into late-stage pipelines, predicted to bring in revenues of $1,414 billion. In 2014, 43 products were approved; however, the cost of developing assets has increased by almost a third, while forecast peak sales have halved. Deloitte’s report included an extension cohort made up of four mid- to large-cap firms for additional insight. The results show that this cohort has performed better than the original 12 firms on all R&D return metrics. This is due to a different R&D model that is based on concentrating on specialized therapeutics, maintaining therapy area focus for higher-value assets, focusing on external innovation, and reducing complexities in development costs, infrastructures and operations.

Source: Deloitte Centre for Health Solutions