In 2017, R&D investments in the pharmaceutical space reached more than $70 billion, with projected figures of over $200 billion by 2024. Pharma is one of the two sectors with semiconductors that are heavily reinvesting its revenue in research and development (15% to 20% on average). Considering the cost explosion of developing a new drug and bringing it to market, the return on investment is declining sharply, according to a Deloitte 2018 report. The golden days of blockbuster drugs are over. Pharma giants face the challenge of drug patent expirations, which will cut a hefty chunk of revenue, and smaller companies need to spend aggressively to enter highly competitive (and uncertain) markets.
As a result, organizations need to rethink their R&D business model to reduce costs and improve efficiency.
Pressing Challenges of Today’s Pharmaceutical R&D
Innovation on new biological pathways represents a significant investment, with higher risks and potentially reduced rewards. However exciting it may be to conduct research on next-gen therapies, ideas may be too quickly adopted as projects begin without a thorough investigation, resulting in wasted time and resources.
Pricing pressures and stringent regulations further blur the line on what constitutes a sound R&D program, forcing organizations to be more cautious and reevaluate the risk vs. benefit ratio.
Another challenge moving into 2020 and beyond is the disconnect between the demand for personalized therapies, which require small-batch production capabilities, and large-scale manufacturing sites commonly in use until today.
With that in mind, pharma companies, big and small, are prompted to adopt a more agile approach to R&D and focus on leveraging strategic improvement opportunities.
6 Ways to Improve R&D Strategy
1. Priority Management
Before adopting a diversification strategy, or on the contrary a consolidation strategy, companies should address the misalignment that may exist between departments and growth goals. Priorities are not the same whether you ask researchers, marketers, or shareholders. These priorities might include:
- Investing in developing the drug that shows the highest market potential
- Opting for the product least likely to fail in a clinical trial (especially in Phase III, the most expensive stage)
- Entering a niche market with less competition and more attractive potentials for revenue
- Going global and penetrating emerging markets
2.Business Process Management
Improving, standardizing, and automating processes result in higher overall R&D efficiency. Benefits of this process optimization include:
- Eliminating manual tasks
- Minimizing redundancies
- Decreasing time to market
- Simplifying processes
- Ensuring compliance
- Decreasing the risk of human error
- Improving collaboration
Integrated processes ultimately benefit not only R&D, but also the entire organization, its supply chain, and its customers.
3. Leveraging Big Data Mining
Big data in life sciences data analytics has taken large precedence. Data in the healthcare space comes from a wide variety of sources, from R&D downstream to patients and their caregivers. Covering such a large spectrum represents a considerable volume of data that holds valuable insights.
The McKinsey Global Institute estimates that adopting big-data strategies could generate up to $100 billion in value annually across the US health-care system. This funding could be used for:
- Fueling innovation with predictive modeling
- Enrolling trial patients with more precision
- Monitoring trials in real-time
- The increasing flow between R&D, physicians, CROs
4. Risk-Based Quality Management
Risk management is an important and powerful aspect of pharmaceutical R&D. As risk-averse as the FDA is, the agency established some guidelines to help companies embrace quality at the core of their development operations. A risk-based approach consists of risk analysis, evaluation, prioritization, and data maintenance.
By putting quality systems and risk assessment center stage, companies are better positioned to design and develop a product of consistent quality while reducing costs associated with mitigating low-risk categories.
5. Preserving Data Integrity
Per the FDA, data integrity refers to data being complete, consistent, and accurate.
In order to achieve data integrity, systems, and processes can be implemented, specifically via electronic audit trails.
Since it is humanly impossible to analyze and review the staggering volume of data collected by audit trails, it is necessary to build a strategy that can customize processes. Use cases help define what data needs reviewing while visualization and mapping roles help determine how data should be reviewed.
6. Forming Strategic Alliances
Inefficiencies are driving up R&D costs and that fact is true for all pharma and biotech companies, regardless of size. In fact, smaller, new entities may not yet have fallen victim to “set-ways” acquired by decades of operating in the field. Change is often regarded as a threat.
There is, however, an opportunity to unify and conquer rather than divide and reign. Conquering cancer, rare diseases, or crippling ailments is a goal we all share. In 2012, 10 companies (giants) joined forces to create TransCelerate Biopharma. The non-profit now counts more than 20 members, demonstrating that collaboration is the most efficient and cost-effective path toward innovation by helping streamline processes and prevent companies from having to reinvent the wheel.
At Treximo, we know that the success of an organization incubates at the research level and matures to fruition at the development stage. While many things can go wrong and incur unwelcome costs along the way, we also know from experience that action should be taken where there is room for improvement. Pharma and biotech companies can no longer ignore the need to reinvent R&D so they can innovate, certainly not when companies like Google show intention to enter that space.
With our expertise in R&D transformation, built both from experience and with experts on the matter, we can help you strengthen your competencies, improve your processes upstream and downstream, and design custom strategies that perfectly align with your expansion and innovation goals.
Let us help you take your R&D power to the next level.