The past 60 years have seen huge advances in many of the scientific, technological and managerial factors that should tend to raise the efficiency of commercial drug research and development (R&D). Yet the number of new drugs approved per billion US dollars spent on R&D has halved roughly every 9 years since 1950, falling around 80-fold in inflation-adjusted terms. There have been many proposed solutions to the problem of declining R&D efficiency. However, their apparent lack of impact so far and the contrast between improving inputs and declining output in terms of the number of new drugs make it sensible to ask whether the underlying problems have been correctly diagnosed. Here, we discuss four factors that we consider to be primary causes, which we call the 'better than the Beatles' problem; the 'cautious regulator' problem; the 'throw money at it' tendency; and the 'basic research–brute force' bias. Our aim is to provoke a more systematic analysis of the causes of the decline in R&D efficiency.
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W. Bains, T. Curtis, B. Charlton, M. Young, O. Imasogie, G. Porges, and B. Munos were generous with their time and ideas during various stages in the genesis of this article.
Jack Scannell, Alex Blanckley and Helen Boldon are employees of Sanford C. Bernstein and declare the following interests: accounts over which Bernstein and/or their affiliates exercise investment discretion own more than 1% of the outstanding common stock of the following companies: Shire PLC. Bernstein currently makes a market in the following companies: Shire PLC. One or more of the officers, directors or employees of Sanford C. Bernstein & Co. LLC, Sanford C. Bernstein Limited, Sanford C. Bernstein (Hong Kong) Limited, Sanford C. Bernstein (business registration number 53193989L), a unit of AllianceBernstein (Singapore) Ltd., which is a licensed entity under the Securities and Futures Act and registered with Company Registration No. 199703364C, and/or their affiliates may at any time hold, increase or decrease positions in securities of any company mentioned herein. Bernstein or its affiliates may provide investment management or other services to the pension or profit sharing plans, or employees of any company mentioned herein, and may give advice to others as to investments in such companies. These entities may effect transactions that are similar to or different from those recommended herein.
Brian Warrington is a co-founder of BB consultants Ltd and provides advice to Phoenix IP Ventures.
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Scannell, J., Blanckley, A., Boldon, H. et al. Diagnosing the decline in pharmaceutical R&D efficiency. Nat Rev Drug Discov 11, 191–200 (2012). https://doi.org/10.1038/nrd3681
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