Pharma Focus Asia

Reviving Pharma Productivity

Prasanthi Sadhu, Editor, Pharma Focus Asia

Eric Valeur, Associate Director, New Modalities, Cardiovascular and Metabolic Diseases, Innovative Medicines and Early Development Biotech Unit, AstraZeneca, UK

Pharma industry has witnessed a staggering decline in R&D productivity and is now a major cause of concern for the industry players. This decline contributed to a downfall in the return on investments over the last two decades. Interestingly, there has been a trend reversal with increase in clinical trial success rate and drug development during 2010-14. Increasing unmet patient needs coupled with fall in pharma productivity owing to the rising costs, and increased rate of drug failures have forced pharma companies to identify and implement new processes for increasing productivity. Declining revenues, rising payer pressures and a changing regulatory landscape have also contributed to this decline. Though a quantitative measure, pharma productivity has been measured by the number of drugs approved (the output) per dollar of R&D spending along with the difficulty and complexity of the FDA’s drug approval process. Return on R&D among the world's largest pharma companies is in the down fall.

While this has been a cause of concern for the industry, there is a ray of hope amidst the chaos. A few companies have been successful in rising against the tide generating stronger returns while delivering value. So what have they done different from companies with returns matching the costs of capital? Organisational effectiveness, operational efficiency and collaboration between industry and academia, rather than operating in silos, appear to be the key for these companies to stay ahead of the competition. Neil Lesser, US principal and life sciences R&D strategy lead at Deloitte, states, “As patients, the health of pharma R&D is important to us all. The global pharma industry continues to face regulatory and reimbursement hurdles that make the operating environment increasingly difficult. While innovative deal-making and pre-competitive collaborations continue to evolve and spark innovation, the pharma industry needs to find a way to address structural and productivity challenges in order to grow and produce new medicines.”

An interesting development in the recent past is a rise in external R&D models across the industry with companies adjusting a portion of their investments directed to internal versus externally sourced programmes. A few examples highlighting change in the ecosystem of innovation in pharma industry are: Allergan’s Open Science model, Takeda’s Center for External Innovation, and Celgene’s R&D Partnership approach. Initiatives such as these can, in all likelihood, increase R&D productivity, by accessing innovation outside the company’s R&D platforms and tapping into the huge potential of securing strong future pipeline by means of risktaking approach. In this age of start-ups technological changes, new approaches and organisational challenges can redefine the business strategies for pharmaceutical and biotechnology companies.

In the article ‘Reviving Pharma R&D Productivity with New Modalities’, Eric Valeur of Astra Zeneca talks about how the pharma industry can leverage new modalities of drug development to increase productivity. Eric suggests drugging well-validated targets can increase chances of success in clinical trials and thus revive R&D productivity.

Author Bio

Prasanthi Sadhu

Prasanthi Sadhu, Editor, Pharma Focus Asia

Eric Valeur

Eric Valeur has over 10 years drug discovery experience gained at Merck, Novartis and AstraZeneca. He is passionate about science but moreover about how bridges can be built between scientists and business professionals to deliver innovation. He holds a PhD in Organic chemistry from the University of Edinburgh, U.K. and an MBA from Imperial College London, U.K.

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