Deloitte’s Center for Health Solutions released its seventh annual report on pharmaceutical innovation earlier this month, which analyzes the R&D investment and sales figures of 12 leading pharmaceutical companies. Since 2010, return on investments have been on a steady decline, totaling 3.7% in 2016. There have been trends of large R&D costs, but forecast peak sales per asset have been declining by 11.4% on a year-on-year basis since 2010. Average peak sales dropped to $394 million in 2016.

In 2016, R&D expenditure was $1.54 billion, a 2% decrease, while forecast sales were down 5% to $394 million. Within the last 7 years, the 12 surveyed companies have released 233 products and progressed 376 assets into late-stage pipelines. Although the number of assets in pipeline stages of development have been consistent for the past seven years, not as many assets have translated into “blockbuster status,” or assets with forecast sales of over $1 billion. The decline in overall performance is largely attributed to instability of pipelines and new R&D costs due to M&A. Although the cost for asset R&D-to-launch had dropped 2.3%, in 2016, costs were still skyhigh at approximately $1.5 billion, 30% more than 2010 costs.

Source: Deloitte