Rethinking R&D to balance efficiency, innovation and sustainability

Optimising R&D budgets for pharma companies involves a multi-pronged approach to balance efficiency with innovation

Optimising R&D budgets for pharma companies in today’s high-cost, high-risk environment involves a multi-pronged approach to balance efficiency with innovation. Here are key strategies that can be adopted to maximise innovation and deliver impactful therapy.

Optimise portfolio management 

◆ Pipeline optimisation: Conduct regular reviews of the R&D pipeline to identify underperforming projects and reallocate resources to higher-potential programs. This flexibility ensures that R&D budgets are always directed toward projects with the best risk-reward ratio. 

◆ Adaptive trial designs: Use adaptive trials that allow modifications in response to interim results. This can optimise both cost and development time.

Focus on high-value therapeutic areas 

◆ Strategic prioritisation: Target diseases with high unmet needs where competition is lower, but demand is high, like certain cancers, neurological disorders, or rare diseases, Orphan drug indications etc. This focus can also yield higher pricing power and a favourable reimbursement landscape.

◆ Repurpose existing compounds: Repurposing compounds with known safety profiles for new indications reduces time and cost in the early development stages, enabling faster entry into clinical trials with lower risk.

Adopt data-driven decision making 

◆ Advanced analytics: Use of predictive analytics and machine learning to identify high potential compounds and forecast trial outcomes.

◆Real-world evidence (RWE): Utilisation of RWE from existing patient data to inform drug development decisions and identify unmet needs, reducing trial costs and duration

Collaborate and co-innovate 

◆ Partnerships with food tech and biotech: Partnering with innovative food tech and biotech firms allow pharma companies to access cuttingedge technologies and promising pipelines 

◆ Academic collaborations: Working with academic institutions for early-stage research can bring new expertise and ideas without the full burden of in-house costs.

Implement cost-efficient operational practices 

◆ Outsourcing and CRO partnerships: Strategic outsourcing to Contract Research Organisations (CROs) for specific R&D phases or functions reduces fixed costs and allows scalability. CROs also provide access to specialised expertise and geographic reach. 

◆ Automation in laboratory work: Automation of repetitive lab tasks and data collection, can significantly reduce costs and increase efficiency.

Use agile budgeting techniques

 ◆ Stage-gated funding: Implement stage-gated budgeting to fund projects based on milestone achievements. This approach limits the financial commitment to underperforming programs and reallocates funds to higher-value opportunities. 

◆ Portfolio diversification: Spread investments across different therapeutic areas and modalities (e.g., small molecules, biologics, gene therapies) to balance risk and capitalise on diverse market potential.

Engage regulators early

◆ Early engagement for fast-track approvals: Engaging regulatory agencies early can help companies align with guidance that allows for expedited approval pathways. This reduces regulatory uncertainty and accelerates time-to-market for high-value therapies.

Enhance talent and resource utilisation 

◆ Cross-functional teams: Use cross-functional teams that bring together expertise from clinical, regulatory, and commercial domains to make informed decisions throughout the R&D process. 

◆ Upskill workforce in data and digital technologies: Train staff to effectively use data analytics, AI, and digital trial technologies, which will improve decision-making and operational efficiency in the long run. By strategically adopting these approaches, pharma companies can create a balanced R&D portfolio that maximises innovation and efficiency, even in a challenging economic landscape.

Pharma companies can optimise R&D budgets using advanced technologies

Pharma companies can optimise their R&D budgets to maximise innovation and deliver high-value therapies by using combination of new technologies to enhance innovation, feed the drug-development pipeline and speed to market. Sophisticated modelling techniques, such as systems biology, can be used to enhance innovation. Model Integrated Approach (PBPK modelling) can be used to predict bioequivalence and can replace some of clinical or bioequivalence studies requirement. Real-world evidence (RWE), new approaches to clinical trials and partnerships, and artificial intelligence (AI) have the potential to transform R&D from drug discovery and development to regulatory approval. Advances in the availability and analysis of real-world data (RWD) have increased the potential for generating robust RWE to support FDA regulatory decisions. Regulatory agencies are accepting the use of RWE in submissions and US FDA has approved several products using RWE.

 High-throughput data-production technologies such as Next-generation sequencing (NGS) is a powerful tool used in genomics research. NGS can sequence millions of DNA fragments at once, providing detailed information about the structure of genomes, genetic variations, gene activity, and changes in gene behaviour. Recent advancements have focused on faster and more accurate sequencing, reduced costs, and improved data analysis. 

Artificial intelligence technologies can help automate tasks so that they can be done faster, cheaper and more accurately. 

Pharma companies can develop partnerships and collaborative R&D models to help broaden patient access, build reputation, and expand research networks and capabilities. 

Pharma companies can use digitalisation to collect data throughout their entire facility. This data can be used to identify areas where procedures and facilities could be improved. 

Focusing on portfolio management is another important area to increase R&D efficiency and include focusing on project related costs and project ROI. 

Another important area to address sustainability concern is reduction in carbon footprint by reducing emissions, optimising manufacturing energy efficiency, and exploring renewable energy sources. Additionally, technological advancements have paved the way for use of green chemistry that focuses on designing products and processes that minimise the use and generation of hazardous substances as part of the manufacturing and packing process of biopharmaceuticals. Life Cycle Assessment of carbon emission should be applied during design phase of development and should cover cradle to grave. This will ensure development and delivery of robust, cost-effective products with better sustainability

Rising research costs,complex drug systems,stringent regulations, and global pressures pose major threats to pharma R&D

According to one of the published reports, the pharma industry invested about $83 billion in R&D in 2019, which is about 10 times the research and development (R&D) spent per year in the 1980s, after adjusting for the effects of inflation1. On the other hand, the efficiency of R&D, which is defined as the successful approval and launch of new medicines (output) in proportional to the rate of the monetary investments (input), has declined since decades. 

The rapidly growing research costs, increased complexity of drug delivery systems and their characterisation, stringent regulatory requirements, complex diseases, global economic pressure, and a highly volatile political environment pose significant threats to the research-based pharma industry. Following are a few strategies that are being adopted to cope up with increased demand in research and expenses.

1. Strategic Portfolio Management: Prioritisation and resource allocations are key strategies that enable companies to maximise the output using available resources. 
2. Merger, acquisition, joint ventures and collaboration: Looking at the complexity of diseases and new drug delivery systems, one needs to collaborate and make the best use of each other’s data, intellectual property, and skill sets. 
3. Embracing technical innovations: The scientific approach to treat a specific patient for a specific disease is to provide personalised medication. Technology such as 3D printing and AI assisted tools to map genetics profile helps in designing personalised medication. 

References 1. https://www.cbo.gov/system /files/2021-04/57025-RxRnD.pdf