Redefining Biopharma R&D Productivity Insights

This document is an Executive Insights report that examines the critical issue of R&D productivity in the biopharma sector. It outlines the challenges of assessing R&D productivity, which is defined as the revenue generated per dollar of investment. The report breaks down R&D productivity into two components: efficiency, measuring drug approvals per dollar invested, and effectiveness, assessing revenue generated per approved drug. It highlights the declining trend in R&D productivity, particularly the efficiency gap between large pharmaceutical companies and smaller firms. The analysis shows that smaller companies outperform larger ones in R&D efficiency, while larger firms excel in generating revenue per approval. The report emphasizes the importance of internal R&D for large pharmas and suggests strategic actions to enhance productivity, including optimizing R&D portfolios and investing in internal innovation. By understanding these dynamics, biopharma leaders can better navigate the evolving challenges in drug development and commercialization.