Key issues in the pharmaceutical industry: consequences on R&D

Drug discovery is hard, and is becoming progressively harder, with the passage of time! No other field has to handle such an interplay of scientific, fiscal and political factors. The rewards are, nonetheless, worth it: people now live healthier and longer lives than at any point of time in the past. Times are, however, hard for pharmaceutical companies: research and development (R&D) costs are spiralling out of control. New drug approvals, on the other hand, have hit a record low; and the situation is expected to worsen, now that the FDA seems to be exhibiting stricter drug approval standards. Other issues also exacerbate circumstances: huge numbers of blockbuster medicines, which drugmakers rely on to generate their incomes, are coming off patent, and generic competition is intensifying. Both public and investor confidence in the industry have fallen drastically owing to rising drug prices, product safety concerns and late-stage clinical trial failures. This article discusses the key issues that pharmaceutical companies face and in particular the implications they have for the R&D process. I finish by suggesting how drugmakers should change their R&D strategies to succeed.