• 7 Jan 2013

Measuring the return from pharmaceutical innovation 2012

A new report from Deloitte and Thomson Reuters.

CAPTION|REUTERS/Michael DalderThe R&D internal rate of return (IRR) of leading pharmaceutical companies has fallen for a second successive year to 7.2% in 2012 from 7.7% in 2011. This is according to the findings of the latest review of pharmaceutical R&D returns performance by Deloitte, the business advisory firm, and Thomson Reuters. However, indications are the decline is beginning to stabilize as these companies have improved the upstream movement of compounds into the late stage pipeline.

  • Internal rate of return falls for a second year to 7.2%, but is stabilizing;
  • Number of product approvals increased by a third between 2010-11 and 2011-12, but value has fallen 30%;
  • By contrast, the number of new compounds entering the late stage pipeline, and their value, has doubled between 2010-11 and 2011-12;
  • Average cost of successfully bringing a product to market has remained relatively constant at $1,137m.

‘Measuring the Return from Pharmaceutical Innovation 2012’, is an annual study of the top 12 research-based pharmaceutical companies globally. Deloitte and Thomson Reuters have collaborated in this study of R&D value measurement combining Deloitte’s R&D advisory experience and financial expertise with Thomson Reuters R&D data and business insights. Download a free copy of Measuring the Return from Pharmaceutical Innovation 2012.

Related Information

Learn more about our Intellectual Property & Science business.

Further information on Thomson Reuters drug repositioning services is available by downloading “Knowledge-Based Drug Repositioning to Drive R&D Productivity,” a Thomson Reuters white paper.

About the Deloitte Center for Health Solutions
The Deloitte Center for Health Solutions, part of Deloitte UK, generates insights and thought leadership based on the key trends, challenges and opportunities within the healthcare and life sciences industry. Working closely with other centers in the Deloitte network, including the US center in Washington, our team of researchers develop ideas, innovations and insights that encourage collaboration across the health value chain, connecting the public and private sectors, health providers and purchasers, and consumers and suppliers.

About Deloitte
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.