How to improve R&D productivity: the pharmaceutical industry's grand challenge
Abstract
The pharmaceutical industry is under growing pressure from a range of environmental issues, including major losses of revenue owing to patent expirations, increasingly cost-constrained healthcare systems and more demanding regulatory requirements. In our view, the key to tackling the challenges such issues pose to both the future viability of the pharmaceutical industry and advances in healthcare is to substantially increase the number and quality of innovative, cost-effective new medicines, without incurring unsustainable R&D costs. However, it is widely acknowledged that trends in industry R&D productivity have been moving in the opposite direction for a number of years. Here, we present a detailed analysis based on comprehensive, recent, industry-wide data to identify the relative contributions of each of the steps in the drug discovery and development process to overall R&D productivity. We then propose specific strategies that could have the most substantial impact in improving R&D productivity.
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Approximately 75% of the cost in research and development is the cost of failure, meaning money spent on projects whose candidate drug was deemed efficacious and safe by early testing but later revealed to be ineffective, unsafe, or otherwise of limited commercial value during human clinical trials.
“Approximately 75% of the cost in research and development is the cost of failure5—that is, money spent on projects in which the candidate drug was deemed efficacious and safe by early testing but was later revealed to be ineffective, unsafe, or otherwise of limited commercial value during human clinical trials.”
From Performance assessment and economic analysis of a human Liver-Chip for predictive toxicology (2022) · cites this paper as [5]
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- Authors
- Paul, S. M., Mytelka, D. S., Dunwiddie, C. T., Persinger, C. C., Munos, B. H., Lindborg, S. R., & Schacht, A. L.
- Affiliations
- Eli Lilly (United States) (US)
- Corresponding author
- Paul, Steven M.
- Venue
- Nature Reviews Drug Discovery
- Published
- 2010-02-19
- Volume
- 9
- Issue
- 3
- Pages
- 203-214
- ISSN
- 1474-1776 (ISSN-L)
- 1474-1784
- OpenAlex
- W2166550586
- Cited by
- 3,566
- References
- 1
- Citations by year
- 2026: 240 · 2025: 237 · 2024: 226 · 2023: 205 · 2022: 214 · 2021: 229 · 2020: 236 · 2019: 200 · 2018: 231 · 2017: 214 · 2016: 223 · 2015: 235 · 2014: 257 · 2013: 230 · 2012: 205
- FWCI
- 51.49
- Type
- journal article
- Language
- en
- Open access
- closed
- Licence
- www.springer.com/tdm (tdm)
- Locations
- Nature Reviews Drug Discovery (publishedVersion)
- PubMed (publishedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Pharmaceutical Economics and Policy
- Physical Sciences › Computer Science › Computational Theory and Mathematics › Computational Drug Discovery Methods
- Life Sciences › Pharmacology, Toxicology and Pharmaceutics › Pharmacology › Pharmaceutical industry and healthcare
- Keywords
- R&D productivity, pharmaceutical industry, drug discovery, drug development, research and development costs, patent expiry, regulatory requirements, innovation strategy
- MeSH terms
- Clinical Trials as Topic, Drug Industry, Efficiency, Humans, Research, Research Design, Time Factors, Models, Economic, Drug Discovery
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