Schuhmacher, Alexander, Wilisch, Lukas, Kandelbauer, Andreas, Hinder, Markus and Gassmann, Oliver (2021) R&D efficiency of leading pharmaceutical companies — a 20-year analysis. Drug discovery today, May 20.

Abstract

We investigated financial data, 270 NMEs and over 160,000 bibliographic data of 14 leading pharmaceutical companies (1999 to 2018).
Our analysis suggests that the most important sources for NMEs in past 20 years were proprietary research (40%), M&A activities (41%) and drug licensing (19%), indicating the high relevance of external innovation in the industry.
We found a nearly linear correlation between R&D spending and R&D output, i.e. the more a company invested in R&D in the past 20 years the higher the output both in terms of NMEs and cumulative impact factors.
Our investigations indicate economies of scale in R&D: Pharmaceutical companies needed on average 16,315 employees in R&D to generate 25 NMEs over the past 20 years. The model the describes the R&D input/output-relation indicates that a further increase in R&D output by 5 NMEs (from 25 to 30 NMEs) would require an additional 3,039 R&D employees, and that the next 5 NMEs would need an extra of 2,570 additional R&D staff.

Item Type:	Article
Keywords:	pharmaceutical R&DR&D efficiencyeconomies of scale
Date Deposited:	02 Jun 2021 00:45
Last Modified:	02 Jun 2021 00:45
URI:	https://oak.novartis.com/id/eprint/44508