R&D In Need Of "Serious Overhaul," Warns Report

In order to achieve the growth targets it has set itself, thepharmaceutical industry is faced with the challenge of cutting drug discovery timelines in half and tripling the number of New Chemical Entities delivered to the development stage. It is a challenge for which the majority of drug companies are ill-equipped to meet, according to a recent study by Andersen Consulting.

Titled Reinventing Drug Discovery, the report notes that most pharmaceutical companies will have to "achieve this higher performance level merely to maintain their current revenue and growth trajectories." Just to keep pace with the annual industry growth rate of 10% expected by shareholders, the top ten majors will need to launch at least five significant NCEs per year, each with annual sales potential of more than $350 million. Mid-tier companies with a 10% growth target need to bring three major products to market annually.

Majors Not On Track The study argues that the industry is not on track to deliver at this level, as it would require a near tenfold increase in current performance. It goes on to note that between 1990 and 1994, the top 20 companies launched an average of just 0.45 NCEs per year and historically only 8% of products on the market reached modest blockbuster status.