Changing R&D models in research-based pharmaceutical companies. Issue 1 (December 2016)

• Record Type: Journal Article
• Authors: Schuhmacher, Alexander; Gassmann, Oliver; Hinder, Markus
• Is Part Of: Journal of translational medicine. Volume 14:Issue 1(2016)
• Page Start: 1
• Page End: 11
• Publication Date: 2016-12
• Subjects: Medicine, Experimental -- Periodicals; Human experimentation in medicine -- Periodicals; Therapeutics -- Periodicals; 615.50724
• DOI: 10.1186/s12967-016-0838-4
• Languages: English
• ISSNs: 1479-5876

Abstract

Abstract New drugs serving unmet medical needs are one of the key value drivers of research-based pharmaceutical companies. The efficiency of research and development (R&D), defined as the successful approval and launch of new medicines (output) in the rate of the monetary investments required for R&D (input), has declined since decades. We aimed to identify, analyze and describe the factors that impact the R&D efficiency. Based on publicly available information, we reviewed the R&D models of major research-based pharmaceutical companies and analyzed the key challenges and success factors of a sustainable R&D output. We calculated that the R&D efficiencies of major research-based pharmaceutical companies were in the range of USD 3.2–32.3 billion (2006–2014). As these numbers challenge the model of an innovation-driven pharmaceutical industry, we analyzed the concepts that companies are following to increase their R&D efficiencies: (A) Activities to reduce portfolio and project risk, (B) activities to reduce R&D costs, and (C) activities to increase the innovation potential. While category A comprises measures such as portfolio management and licensing, measures grouped in category B are outsourcing and risk-sharing in late-stage development. Companies made diverse steps to increase their innovation potential and open innovation, exemplified by open source, innovation centers, or crowdsourcing, plays a key role in doing so. In conclusion, research-based pharmaceutical companies need to be aware of the key factors, which impact the rate of innovation, R&D cost and probability of success. Depending on their company strategy and their R&D set-up they can opt for one of the following open innovators: knowledge creator, knowledge integrator or knowledge leverager.