With the current economic climate, many companies are looking for ways to reduce research and development (R&D) costs wherever they can. Pharmaceutical companies are one of the biggest spenders in the area of R&D. Their success is almost completely dependent upon the discovery and development of new medicines.
According to the ninth edition of Evaluate Pharma, R&D spending overall is expected to reach $182 billion by 2022, increasing by 2.8% annually. Here are some strategies companies are using to cut costs, streamline processes and improve efficiency.
Outsource part of the R&D process
Over the past decade, companies have looked at outsourcing at least part of their R&D processes. The amount spent on the development of any drug usually depends mostly on what it costs to conduct the studies that prove it is safe and effective to secure regulatory approval.
Today most biotech and pharmaceutical companies outsource at least a portion of the clinical trial management process. They use contract research organizations (CRO companies) that offer support in the form of research services outsourced on a contract basis.
This can reduce the time it takes to conduct a trial than if it is done in-house, which can result in significant cost savings. Some CROs manage just about every aspect of a clinical trial, from enrolling patients through to getting final regulatory approval.
Optimize and automate processes
Companies are optimizing and automating business processes more than ever before. More manual tasks are gradually being automated, leading to less risk of errors. Automating clinical trial processes shortens the time to market and reduces costs.
Using in-line analytics instead of periodically measuring grab samples is just one way companies are improving processes. This gives them access to continuous, real-time data.
Digital instruments offer many opportunities to simplify regulatory compliance, moderate technician training and reduce measurement point maintenance, all of which helps to minimize costs and increase productivity.
Companies are using Simple Lean techniques to eliminate unnecessary steps or ‘non-value adding’ activities. This helps to speed up processes and reduce cycle times.
Gain insights from big data
Companies are looking at driving down costs by mining ‘real-world data’ from healthcare providers. This data could yield insights that allow for the development of new drugs and also help to improve patient safety.
Collaboration is crucial
When all stakeholders in the industry are able to collaborate and share data – it becomes more possible to identify the greatest value with the best outcomes and reduce costs.
Many companies are taking various steps to increase their innovation potential and open source, innovation centers and crowdsourcing can play a key role. Various pharmaceutical companies have already developed collaborative web-based programs and incubator programs.
Strategic development alliances are becoming part of the global pharmaceutical landscape. These offer opportunities to gain access to worldwide innovations aimed at decreasing R&D costs through the sharing of risks. Industry partnerships can help to improve and streamline operations in a way that’s not possible for one company operating in isolation.
Recently a group of 10 large pharmaceutical companies signed an initiative aimed at improving the way clinical trials are conducted.
Working together could help with sharing of research and solutions that could simplify and accelerate the delivery of new drugs for patients.
What is important with industry collaborations and partnerships is that the best business practices apply, such as real-time communication systems, to allow for real-time data sharing and a clear understanding of IP sharing.
A final word
The future of pharmaceutical companies could depend on rethinking of business models, outsourcing R&D, optimizing and automating processes as well as collaborating and forming strategic partnerships.