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Drug Administration (FDA) approvals for new molecular entities (NMEs) – a good directional indicator of innovation – fell from 31.5 in 1990 to an average of just 22.9 from 2001-20104
.
Nevertheless, there are signs of an upturn in approval rates, with the average annual NME fi gures for the years 2011-2013 rising to 325
.
But is this enough evidence to suggest that pharmaceutical players are starting to turn the corner on innovation in drug development?
To explore this question further, KPMG sought the perspective of senior executives from the R&D departments and R&D support functions of some of the world’s leading pharmaceutical companies. Their responses cover a range of critical issues such as productivity, attitudes to risk, organizational structure, and governance, and offer some valuable ideas for increasing innovation to feed the pipeline of new products.
FOCUS 19
Exchange rate and margin adjusted ROI on R&D spend from 1990-2013
19% 17% 15% 13% 11% 9% 7% 5%
Source KPMG estimates, 2014 Our survey results tell us that...
• Innovation is on the rise in companies after a decade of decline. • The trend toward increased outsourcing and collaboration is set to continue, with a shift in emphasis from pure cost-saving to accelerated innovation.
• Administration and organizational complexity is preventing scientists from devoting time to research and is holding back progress in R&D.
• Companies are still struggling to determine their appetite for risk; some research decisions are made too subjectively, while others struggle from excessive caution and over-analysis.
5
The R&D cost of a new medicine, J. Mestre-Ferrandiz, J. Sussex and A. Towse, Offi ce of Health Economics, December 2012 (Hansen, 1979; Wiggins, 1987; DiMasi et al, 1991; OTA, 1993; DiMasi et al, 2003; Mestre-Ferrandiz et al, 2012) 4FDA offi cial fi gures, FDA website, accessed 14 March 2014 IBID
3 © 2014 KPMG LLP, a UK limited liability partnership, and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative, a Swiss entity. All rights reserved.
R&D INNOVATION
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