This site is intended for Healthcare professionals only.
×

Pharma industry returns on R&D investment hit 9-year low


Pharma industry returns on R&D investment hit 9-year low

An annual survey of the economics of pharma research and development (R&D) by the consultancy found that despite a steady flow of new medicines reaching global markets, the 12 drugmakers’ average return on their R&D fell to 1.9 per cent this year, from 3.7 per cent a year ago.

LONDON: The cost of developing a new drug has nearly doubled since 2010 and the world’s 12 biggest drugmakers are making the lowest return on their R&D investments in nine years, according to Deloitte.

An annual survey of the economics of pharma research and development (R&D) by the consultancy found that despite a steady flow of new medicines reaching global markets, the 12 drugmakers’ average return on their R&D fell to 1.9 per cent this year, from 3.7 per cent a year ago.

The average cost of bringing a new medicine to market is now $2.18 billion, up from $1.19 billion back in 2010.

Yet forecast peak sales for new medicines have halved over the same period to $408 million on average – a decline that reflects a growing focus on relatively small targeted patient groups, leading to multiple niche treatments.

“Despite the launch of many successful products, growing development costs and regulatory constraints are making it more difficult than ever for companies to redeem their R&D investment,” said Deloitte consulting partner Colin Terry.

Overall, R&D returns are down by 8.2 percentage points since 2010, when they stood at 10.1 per cent.

A group of younger and more specialised biotech companies analysed by Deloitte fared a lot better, with average returns of 9.3 per cent, although this was still down from 12.5 per cent in 2017.

The 12 big drugmakers tracked by Deloitte are Pfizer, Roche, Novartis, Sanofi, GlaxoSmithKline, Johnson & Johnson, AstraZeneca, Merck & Co, Eli Lilly, Bristol-Myers Squibb, Takeda and Amgen.

The four biotech companies are Biogen, Celgene, Gilead Sciences and AbbVie.

Read Also: Pharma Industry needs to Self Regulate: Dr RK Vats, Chairman, NPPA

The following two tabs change content below.
MD Team

MD Team

At Medical Dialogues, we are a team of young professionals strongly advocating of the transparency in the medical sector through the free flow of medical information, health and medical news. MD Team covers a variety of news related to the healthcare, pharma and medical device industry in India. Our team can be contacted at editorial@medicaldialogues.in Contact no. 011-43720751


Source: Reuters
0 comment(s) on Pharma industry returns on R&D investment hit 9-year low

Share your Opinion Disclaimer

Sort by: Newest | Oldest | Most Voted