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The productivity crisis in pharmaceutical R&D.

Fabio Pammolli¹, Laura Magazzini, Massimo Riccaboni

¹Institutions, Markets, Technologies Institute for Advanced Studies Lucca, Piazza S. Ponziano 6, 55100 Lucca, Italy.

Nature Reviews. Drug Discovery

|June 2, 2011

Summary

Pharmaceutical research and development (R&D) productivity has declined due to increased investment in high-risk areas targeting unmet medical needs. Despite regional differences in R&D portfolios, no productivity gap was found between US and European companies.

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Area of Science:

Pharmaceutical Sciences
Drug Discovery and Development
Biotechnology

Background:

Understanding of disease molecular basis has increased, expanding therapeutic targets.
Pharmaceutical research and development (R&D) investment has risen substantially.
Despite increased investment, new drug approvals have not proportionally increased, indicating challenges in therapeutic innovation.

Purpose of the Study:

To examine the decline in pharmaceutical R&D productivity over the past two decades.
To identify the determinants of this decline in R&D productivity.
To investigate potential variations in productivity based on company regional location.

Main Methods:

Analysis of a large database containing R&D project information for over 28,000 compounds investigated since 1990.
Examination of R&D investment trends and their correlation with therapeutic innovation output.
Comparative analysis of R&D portfolio composition and productivity across different geographical regions.

Main Results:

A decline in pharmaceutical R&D productivity has been observed over the past two decades.
This decline is linked to increased R&D investments in high-risk areas, including unmet therapeutic needs and unexploited biological mechanisms.
Companies in the United States and Europe exhibit differences in R&D portfolio composition, but no significant productivity gap was identified between these regions.

Conclusions:

The pharmaceutical industry faces challenges in R&D productivity, driven by a strategic focus on high-risk, high-reward therapeutic areas.
Understanding the determinants of R&D productivity is crucial for future drug development strategies.
Regional location does not appear to be a determining factor in pharmaceutical R&D productivity, suggesting common global challenges and opportunities.