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Drugmakers make lowest return on R&D investments in 9 years: Deloitte

The average cost of bringing a new medicine to market is now $2.18 billion, up from $1.19 billion back in 2010

Reuters  |  London 

The company already enjoys a 67-68 per cent share of the respiratory drugs market in India and has potential for a 14-15 per cent growth

The cost of developing a new drug has nearly doubled since 2010 and the world's 12 biggest are making the lowest return on their investments in nine years, according to

An annual survey of the economics of pharma (R&D) by the consultancy found that despite a steady flow of new medicines reaching global markets, the 12 drugmakers' average return on their fell to 1.9 per cent this year, from 3.7 per cent a year ago.

The average cost of bringing a new medicine to market is now $2.18 billion, up from $1.19 billion back in 2010.

Yet forecast peak sales for new medicines have halved over the same period to $408 million on average - a decline that reflects a growing focus on relatively small targeted patient groups, leading to multiple niche treatments.

"Despite the launch of many successful products, growing development costs and regulatory constraints are making it more difficult than ever for companies to redeem their investment," said consulting partner Colin Terry.

Overall, R&D returns are down by 8.2 percentage points since 2010, when they stood at 10.1 per cent.

A group of younger and more specialised biotech companies analysed by fared a lot better, with average returns of 9.3 per cent, although this was still down from 12.5 per cent in 2017.

The 12 big tracked by Deloitte are , , , , , , AstraZeneca , Merck & Co , Eli Lilly , Bristol-Myers Squibb , Takeda and Amgen.

First Published: Wed, December 19 2018. 05:34 IST
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