As R&D returns take a hit, some pharmas are ramping up spending

Dive Brief:

• Amid intense scrutiny on pharmaceutical innovation and drug value, the industry saw far fewer novel drugs approved by the Food and Drug Administration in 2016 than in years past.

• Only 22 new molecular entities (NME) were approved this year, down substantially from the two-decade high of 45 last year.

• Adding to that poor showing, a new report published earlier this month put the projected returns from pharma's late-stage drug pipeline at a measly 3.7%. Taken together with the falling NME approvals, the report raises questions about the efficiency and success of pharma R&D.

Dive Insight:

The report, compiled by the consulting and accounting firm Deloitte, paints a picture of an industry caught between rising R&D costs on one hand and falling average projected peak sales on the other.

According to Deloitte, the cost to usher a drug from discovery all the way through launch - an elusive and usually controversial figure - stabilized at a little over $1.5 billion this year. At the same time, forecast sales per asset have dropped steadily in recent years, leading to an erosion of the projected returns from late-stage pipelines. 

Pricing backlash, coupled with a broad array of treatment options in many primary care areas, puts pharma under even more pressure to deliver clinically meaningful innovations. With that context in mind, BioPharma Dive has been collecting data to compare R&D spending as a percentage of product sales at notable companies to their industry peers. 

For details see: http://www.biopharmadive.com/news/as-rd-returns-take-a-hit-some-pharmas-are-ramping-up-spending/433063/