The Drug Firm, Innovation And Productivity

Last year the pharmaceutical industry spent over $40 billion on R&D in a health care environment that is experiencing flattening profits, cost containment and industry consolidation. Even within the current climate of acquisition and merger, R&D capability and the capacity to innovate remain key.

However, as investment in R&D grows (some 15.5% of sales in 1995 compared with 14.8% in 1991), the number of New Chemical Entities being introduced worldwide is falling or stagnating at best; in 1989 35 NCEs were introduced, by 1991 this had risen to 47, and by last year the number had fallen to 33.

How to be innovative and improve productivity was one of the key themes at The Economist's third pharmaceutical conference, held in London this month, which had the theme of shaping the future through innovation.