The Productivity of Drug Development: A Systematic Review

Abstract

The evaluation of the productivity of research and development (R&D) is crucial for the management of pharmaceutical businesses, and various methods, indicators, and proposals for R&D improvement have been investigated; however, there is no consensus on a unified criteria. To resolve this issue, we present a comprehensive review of previous studies on the topic. Publication databases were searched for all relevant studies related to the following: the pharmaceutical industry, R&D, and productivity; a total of 6,357 publications were obtained. Through in-depth screening, 190 publications were selected and subsequently reviewed. As a result, methods for the evaluation of pharmaceutical R&D were classified into four major approaches: R&D cost, regression analysis, ratio analysis and data envelope analysis (DEA). The characteristics of each of these approaches were examined from the following three perspectives: the pharmaceutical industry-level, company-level, and project-level. Furthermore, several elements were identified that explain the significant decrease in pharmaceutical R&D productivity: the sustainability of a business model; increase in R&D expenditure; effectiveness of outsourcing; size of the company; and premiums and amortization with mergers and acquisition (M&A). By forming an intellectual basis for the evaluation procedures, the present study has contributed to the theory of R&D management and to the practices used in the pharmaceutical industry.