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Deloitte's 14th Annual Pharmaceutical Innovation Report: Pharma R&D Return on Investment Rebounds After Record Low | ||
By: PR Newswire Association LLC. - 25 Apr 2024 | Back to overview list |
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NEW YORK, April 25, 2024 /PRNewswire/ -- Key takeaways
Why this matters The analysis shows the average returns for the cohort have risen to 4.1% in 2023, up from the 2022 record low of 1.2%. This follows the 6.8% peak in 2021, which was driven by COVID-19 assets passing through the pipeline. R&D executives who were interviewed as part of the analysis confirmed that R&D operating models continue to experience significant pressures due to:
Key quotes "With 14 years of analysis to draw on, it's clear that transformational change in R&D is needed to consistently drive increased returns across the biopharma industry. Our related research suggests that these organizations have an opportunity to unlock $5 to 7 billion in value with R&D representing the top value opportunity at 30 to 40%. There is real potential to drive down development costs, increase speed to market, and unlock a new era of R&D productivity." — Pete Lyons, U.S. life sciences sector leader, and principal, Deloitte Consulting LLP "The increase seen in the Pharmaceutical Innovation Report 2023 analysis is certainly encouraging, but sustaining the flow of high-quality assets into the late-stage pipeline tends to be a challenge. Companies should continue to sufficiently invest in early R&D, through both traditional and AI-enabled approaches, to drive innovation, and remain ruthlessly focused on execution to help accelerate development timelines. By analyzing trends over time, we offer a breadth of industry experience to life sciences clients who are leading life-changing R&D." — Kevin Dondarski, life sciences R&D strategy leader, and principal, Deloitte Consulting LLP Pharma fears regulation may stifle innovation R&D executives were more concerned with changing regulations than rising R&D costs and increasing cycle times. For example, executives indicated that the U.S. Inflation Reduction Act (IRA) may stifle innovation because the incentives will be lower and profitability will be reduced, suggesting that biopharma companies may take fewer and smaller risks when progressing assets. Interpreting the new and evolving regulatory expectations and implementing any necessary changes in a coordinated, cost-efficient and timely manner, across a number of business functions, appears to be a significant challenge for the industry. AI strategies and adoption are in early innings Methodology Since 2010, the "Measuring" the return from innovation series has tracked the projected return on investment from the late-stage pipelines from an original cohort of 12 leading global biopharma companies. During that time the cohort has expanded and today the leading 20 global pharmaceutical companies are tracked using the same comprehensive and consistent methodology. About Deloitte's Industry Advantage For additional information and case studies on how Deloitte works with clients to create Industry Advantage, visit our website. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as "Deloitte Global") does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the "Deloitte" name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about?to learn more about our global network of member firms. View original content to download multimedia:https://www.prnewswire.com/news-releases/deloittes-14th-annual-pharmaceutical-innovation-report-pharma-rd-return-on-investment-rebounds-after-record-low-302126552.html SOURCE Deloitte |
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