The pharmaceutical industry estimates that out of 10,000 candidates in the lab, only 10 ever reach clinical trails and only one in five of these makes it to market. The common view is that the typical new drug development process takes between 10 and 15 years and costs $800m to $1200m for each new drug launched. With the beneficial impact of new technologies from the human genome project initially falling short of expectations, current innovation effort has been looking at how to use combinational chemistry and high-throughput screening more appropriately and find new approaches such as in-silico biology to identify the most significant targets. The key test is to unify the new technological breakthroughs with depth of prior knowledge and experience to get the right blend of skills and disciplines to deliver the much needed results.

The challenges for the sector are significant – cancer and Alzheimer’s are more complex diseases than those already addressed and treatments are taking longer to develop and perfect. If potential winners can be identified earlier the ramifications will be huge. In a sector where success ratios are so low, a marginal 5 to 10% reduction in the failure rate in clinical trials would effectively double the number of new product launches. The industry wants to ‘fail early and fail cheap.’ US drug companies, especially, are also being squeezed by falling margins, generic competition and regulatory scrutiny and so need to improve efficiency. As well as R&D effectiveness some, such as Pfizer, have examined their sales and marketing activities. Reinventing how the products are sold is a current challenge, with reducing the size of overly large sales forces top of the list. There is also a wider argument that the sector actually needs to reinvent its business model and, like other sectors, several drug companies are looking to outsource some functions and squeeze the supply chain.

Conducting research in China and India is also an arena that has receiving much attention. With its growing pharmaceutical market, significant tax incentives, cheaper clinical trails, over 200,000 research scientists and several leading research institutions, working more closely with Chinese partners has become a priority for many major firms over the past few years. Having a research facility in China has quicklymoved from being the exception to become the norm for all the big pharma companies.