Measuring the return from innovation: Is R&D earning its investment?

• 10 of the top 12 pharma firms saw their internal rate of return (IRR) decrease from 11.8% in last year to 8.4% in this, representing a fall of just under 30 per cent.

• The average cost of bringing a drug to market has also increased by 21% compared to last year to $1.05 billion, yet the study says the commercial value of these projects are no greater than a year ago.

• The study adds there is a wide variation from company to company, from the lowest cost of bringing a drug to market being $439 million to the highest being $2.47 billion.

• The average number of late-stage compounds in development per company also decreased from 23 last year to 18 in 2011, painting a negative picture of research for the industry.

• The study says these firms are struggling to deliver improved R&D returns as a result of a number of factors, including: rising development costs, stagnating revenue forecasts and continued late-stage terminations.

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