R&D's risk profile is becoming unsustainable. With a history of declining productivity, the onset of personalized medicine and new entrants causing havoc, Life Sciences executives should fundamentally revisit their approach to R&D. By 2030, the R&D focus is likely to shift to outsourcing, resource sharing and advanced technologies.
Spiraling R&D expenses, shorter product lifecycles and the demise of blockbusters, combined with increased risks, are reducing return on investment for life sciences companies. Governments, insurers and patients are demanding more transparent drug pricing and, with rising demand for healthcare and falling budgets, there is pressure to reduce costs and prices.
In order to raise efficiency and productivity, more and more R&D is likely to move outside the organization, and by 2030, we expect three major R&D company archetypes to emerge:
Future R&D decentralization should also be driven by changing funding models. By 2030, we anticipate R&D funding will be facilitated through:
In order to create an R&D capability that is innovative and sustainable, life sciences companies should: