ROI for pharma declining?

KEY TAKEAWAY: Deloitte states, in a new report, that returns for pharma are declining and that the pharma industry continues to face regulatory and reimbursement hurdles weighing on the research and development returns. This is partly true.

Key findings

After reviewing the estimated returns of 12 leading biopharma companies and comparing their performance with four mid- to large-cap companies, the study finds:

  • Annual projected pharma R&D returns continue to decline to 3.7 percent.
  • Peak sales per asset fall 11.4 percent year-on-year since 2010
  • The costs to bring a product to market stabilizes, from $1,576 Million in 2015 to $1,539 Million in 2016
  • Smaller pharma companies have seen a decline in overall performance, but on average they continue to outperform their larger counterparts, generating returns up to three times higher.

OK, let’s stop a moment and think about something:

1ne: Blockbuster drugs: The days of blockbuster drugs may be coming to an end because most of the blockbuster drugs are off patent or coming off patent.

2wo: There aren’t any “mass market” pharma products in development that significantly outperform current generic products on the market.

3hree: The cancer “moonshot” is a pipe dream since cancer is not just one disease and mutates from patient to patient.  A cancer drug could become a blockbuster in sales dollars only do to high costs.


Lack of innovation in DTC marketing has been absent for quite a while, although certain companies are dipping their feet in social media.  The idea that someone is going to see a DTC TV spot and run to their doctor is dated and myopic.  DTC marketing WILL come under increased pressure to demonstrate value to the organization at a time when the whole pharma business model is coming under attack.

Will DTC managers be able to experiment with new channels to reach patients at a time when they have to show results?  Doubtful.  We feel that the DTC marketing model will change from marketing to patients to marketing with patients/


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