Life Sciences R&D & Medical

Calculating ROI: An R&D framework for pharma to produce therapies more efficiently

By Mukulita Bapat , and Scott Sandford

Dec. 12, 2023 | Article | 5-minute read

Calculating ROI: An R&D framework for pharma to produce therapies more efficiently


As the pharmaceutical industry considers how to navigate the losses of patent exclusivity rights and the effects of new legislation like the Inflation Reduction Act, it should aim to offset these challenges by continuing to improve R&D productivity. After seeing the cost and time required to bring a therapy to market increase for decades, pharma has been able to reduce cycle times and costs in recent years. New approaches are critical to continue this trend.

 

ZS believes we can continue to advance R&D productivity holistically, rather than viewing the life cycle as many smaller parts and problems. One—admittedly generalized—framework that is especially useful is a return on investment (ROI) equation designed to measure a therapy’s potential. An ROI equation (see below) can help teams focus on maximizing value with the right assets for their portfolio while reducing costs and time to market. The equation focuses on five key elements: portfolio optimization, value maximization, R&D success rates, discovery efficiency and development efficiency. 

A programmatic approach for improving biopharma R&D productivity



These five elements don’t exist in a vacuum, of course. To avoid adversely affecting one of them while trying to improve another, we recommend a programmatic approach—intelligent protocol design is one example.

 

As R&D organizations assess how to solve current and anticipated productivity challenges, each of these five elements provide ample opportunity for improvements. 

The concept of calculating ROI for clinical trials and potential therapies is different from how many of us think of R&D productivity. However, the industry needs new approaches to navigate an increasingly complex life cycle. Using an ROI framework will help pharma companies and R&D organizations deliver more therapies while using fewer resources.



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