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.
Unprecedented disruption of the R&D ecosystem.
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:
- Technology players: playing a pivotal role in the R&D value chain
Leveraging new technologies such as AI, cloud-based platforms, machine learning, cognitive technology and wearables.
- Tech-enabled clinical research organizations: escaping from commoditization
Owning platforms and offering a broad portfolio of services across the R&D value chain, beyond outsourced clinical trials.
- Project-focused players: managing the R&D value chain end-to-end
Teams of stakeholders including pharma and biotech players, academia and healthcare startups.
Emerging funding models
Future R&D decentralization should also be driven by changing funding models. By 2030, we anticipate R&D funding will be facilitated through:
- Cost and resource sharing practices among multiple healthcare stakeholders to lower R&D costs
- Equity partnerships between clinical research organizations and industry players to ease the R&D financial burden and drive innovation and cost effectiveness
- Crowdfunding should accelerate drug development and distribute financial risk.
Become an R&D front-runner by 2030
In order to create an R&D capability that is innovative and sustainable, life sciences companies should:
- Broaden their R&D scope
By rethinking their remit, R&D teams can become fully patient/consumer-centric rather than product-centric, expanding scope across prevention, interception, treatment and real cure.
- Develop toolkits and digital culture for success
This involves crafting scientific and digital technology roadmaps, through in-house workforce planning or new resourcing, enabling flexible R&D teams.
- Variabilize strategically
Establish a clear position in the R&D value chain and develop matching capabilities, sharing risks and benefits with technology players, clinical research organizations and the public.