By Rob Wright, Chief Editor, Life Science Leader
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R&D costs per NME (new molecular entity) are increasing at exponential rates. When you consider a pharma company’s R&D spend in a year, and divide that by the number of drugs approved, you obtain clarity on the skyrocketing cost for successful drug discovery. In a November 2012 presentation, Novartis Global Head of Development, Timothy Wright, M.D., estimated his company’s R&D costs for the 21 recently approved drugs to average a stunning $3.9 billion per new drug. This may seem high, but is well below the industry average of $5.2 billion. When comparing Novartis’ numbers to its top 10 pharma peers, they look really good, having the lowest cost per drug. Merck is fairly close at $4.2 billion per drug (16 approvals in 2012), while AstraZeneca is in the stratosphere, averaging a staggering $11.7 billion for its five approvals. Obviously, these spending levels are not sustainable. A revolution in the clinical trial space is needed — desperately — and CROs play a key role with all sizes of pharmaceutical and biotech companies. For example, when Pfizer announced in 2011 the reduction from 17 functional clinical research providers to two strategic partnerships with ICON and PAREXEL, it was clear the company no longer viewed CROs as merely excess research capacity. Pfizer’s aim was to provide its strategic partners with a “significant” amount of work, make them more accountable for results, with the desired result being increased productivity. At the opposite end of the spectrum are virtual drug development organizations, such as Sensor Pharmaceuticals. Jim Hauske, president and founder of Sensor, says, “It’s important to appreciate in my present capacity, that all experiments, data acquisition, and all FDA-required information, guidance/meetings, consultations, and submissions are outsourced. Over the 8-plus years I was senior VP of drug discovery at Sepracor, I did have many occasions requiring an insource versus an outsource decision. However, I outsource everything now.” Because outsourcers play such a vital role to the pharma/biopharm industry, Life Science Leader magazine developed the CRO Leadership Awards, which are determined through customer data analysis via an independent market research organization. CROs that rank in the top 20% for innovation, productivity, quality, regulatory, and reliability are CRO Leadership Award winners for that category. Life Science Leader would like to congratulate all of this year’s CRO Leadership Award winners, and recognize them for the important role they play in continuing to revolutionize clinical trials.