Can emerging technology help biopharma improve the returns on R&D?

Greg Reh, Vice Chairman and Life Sciences Sector Leader, Deloitte LLP

Nearly $2 billion. That’s the average cost to bring a new drug to market, according to Deloitte’s latest report on research and development (R&D) costs, and returns, among 12 of the world’s leading biopharmaceutical manufacturers. While our study finds that biopharma companies are investing more than ever to develop innovative and effective therapies, their returns aren’t keeping pace.

Projected returns on R&D among these firms fell to an average of 3.2 percent in 2017—down from an average of 10.1 percent in 2010—according to Deloitte’s eighth annual report on returns from pharmaceutical R&D. An extended cohort of mid-to-large biopharma companies continue to outperform the original pharma cohort, with projected returns of 11.9 percent in 2017 (up from 9.9 percent in 2016), but are still below the high of 17.7 percent reached in 2014.

Despite shrinking returns witnessed over the past several years, I see plenty of reason for optimism, particularly among biopharma companies that are leveraging new scientific platforms, including technologies that can drive greater productivity and harness data sources. Technologies such as artificial intelligence (AI), robotic and cognitive automation (RCA), and digital health tools have the potential to improve the efficiency of clinical trials, accelerate time to market, and improve the evidence generated. Moreover, technology can help companies streamline some of their most time-consuming processes and ensure accuracy in repetitive operational tasks—from drug discovery to regulatory filing.

Here’s a look at several technologies and how they might benefit biopharma companies:

  • RWE and AI can keep clinical trials on track: Nearly 80 percent of clinical trials fail to meet their initial enrollment projections. Difficulty or delays in recruiting patients can hamstring a clinical trial. Through the use of real-world evidence (RWE), biopharma companies have the ability to quickly identify patients to enroll in clinical trials. Deloitte’s 2017 RWE benchmarking study found that biopharma companies are starting to invest in RWE capabilities and are exploring a number of use cases. The industry, for example, is prioritizing trial patient recruitment as an RWE application. A step further, applying AI to RWE data can help companies predict performance of certain trial sites, anticipate drop outs, and in some cases, help predict outcomes.
  • Patient-centered clinical trials can improve recruitment and retention: Emerging technologies such as social media, health apps, wearables, connected devices, and telemedicine all have the potential to transform the way patients are engaged during clinical trials. This can enable expedited enrollment and improve retention. In addition, novel clinical trial approaches—such as master protocols that test multiple treatments at once using a shared patient network—could help make trials more accessible to patients. Greater patient access to trials can be a win-win for patients and companies that are seeking to advance treatments and cures to market. 
  • Robotic and cognitive automation can boost accuracy and time to market: RCA can enable cost efficiency, productivity gains, and quality/compliance improvements in clinical trials. Research indicates that as much as 50 percent of today’s tasks can be eliminated through automation. Automation of certain aspects of the clinical trial process could free up teams to focus on critical path activities or accomplish tasks that were previously thought to be too time consuming or costly.

    Companies are looking at how they can use natural language generation (NLG) to automatically generate patient narratives, automate writing processes, and leverage other technologies to file NDAs faster and at lower cost.

There are many reasons to be bullish on biopharma

Recouping R&D investments has become more challenging for biopharma firms due to increased competition, expiring patents, declining profitability, evolving regulations, and pricing, which is under close scrutiny across the health care landscape. Due to the high scientific risk associated with drug development, many promising new therapies never make it to market.

But there’s reason to be optimistic about the future for biopharma. There were many innovation success stories in 2017, which give us a glimpse into what might lie ahead in 2018 and beyond. In addition to numerous immunotherapies being developed, the first chimeric antigen receptor T cell (CAR-T) therapies, which use a patient’s own reprogrammed cells to target and kill cancer cells, were approved in 2017. Another first for 2017 was the approval of a digital pill—a pill embedded with a sensor that confirms when a patient has swallowed it. The sensor transmits data to a smartphone application that can be shared with selected caregivers, helping to improve medication adherence.

Financial returns, although important, are only one measure of innovation. Taking advantage of emerging technologies to advance new scientific platforms can offer great promise for making additional treatments and cures available to patients.

Download the report.

Deloitte’s life sciences and health care practice is composed of more than 7,300 professionals in over 90 countries that provide audit, consulting, financial advisory, risk management, tax, and related services to industry clients. We understand the complexity of today’s life sciences challenges, including the journey to redefine patient-centric care, innovate, and grow, and help clients through the challenges that each part of the journey can bring. Our professionals are backed by a global organization whose tools, industry-wide experience, and knowledge are aligned to help companies see what’s in front of them and what’s ahead. To learn more, visit www.deloitte.com/us/lifesciences.

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