R&D Productivity: Not So Bad After All?
Falling Big Pharma R&D productivity is often cited as the industry's Achilles heel. Yet simply counting the number of drug launches each year versus R&D spend doesn't give a true picture of the industry's productivity, argue analysts at CSFB. Productivity is not falling, they say, but gains just aren't visible yet. In five years, large pharmaceutical companies-particularly those in Europe-may emerge from this fog with renewed strength.
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Management endorsed GlaxoSmithKline's new R&D structure-the CEDDs-as an overwhelming success during the Big Pharma's December 2003 R&D day. But the analyst and investor communities weren't uniformly impressed. And fair enough: regardless of GSK's excitement and the storm of numbers and early stage results that promise a robust series of product launches, it's too early to judge the success of the CEDD experiment. A lot can go wrong between now and 2008, when the pipeline will ripen or rot.
The blockbuster business model that underpinned Big Pharma's success is now irreparably broken: the costs of commercialization are too high and likely returns below the cost of capital. The industry needs a new approach, constructed from four inter-related building blocks--focused R&D; partnerships; customer solutions, not products; and a business unit, not functional, organizational model.
COVID-19 has triggered a dramatic shift toward virtual consultations and telemedicine, encouraged by more relaxed regulations and payer support.