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Pharmaceutical Investment in R&D Grows by 4.5% in 2023

The pharmaceutical industry sees a surge in R&D investment, reaching $145.5 billion last year, 4.5% higher than drug launch budgets in 2022. Deloitte’s report on pharmaceutical innovation underscores challenges like regulatory shifts and the need for adaptable clinical trials. AI offers promise in enhancing R&D productivity, especially in oncology and rare diseases.




More innovation for the pharmaceutical industry. In the last year, investment on research and development (R&D) in the sector was $145.5 billion, 4.5% more than what was allocated to launch new drugs in 2022, according to the latest performance report from pharmaceutical innovation prepared by Deloitte. This document analyzes a total of twenty companies in the sector, and this year ten R&D leaders have been interviewed.

According to the report, the increase in R&D spending can be attributed to factors such as more complex tests , regulatory changes or simply the impact of inflation. To improve the productivity of the sector, the document encourages the implementation of more flexible and adaptable clinical trials.

In parallel with the increase in investment, in 2023, the average R&D cost to advance an asset from discovery to launch remained stable compared to the previous year, to an average of $2,284 million per asset. The stagnation is due to a higher number of assets in the portfolio this year, due to the increase in the scope of assets.

The document also emphasizes the great challenges facing the biopharmaceutical R&D model, ranging from regulatory changes, the accelerated pace of scientific and technological advances and the loss of exclusivity in high-value assets . Against this backdrop, artificial intelligence (AI) presents new opportunities to improve R&D productivity, accelerating patient access to new therapies.

In the last year, investment on research and development (R&D) in the sector was $145.5 billion. Source

R&D investment has been higher in sectors such as rare diseases or oncology

Advances in AI, including generative AI, can enable companies to demystify the biology of complex diseases , accelerate drug discovery, reduce study timelines, reinvigorate the clinical trial experience, and improve regulatory success. Ultimately, the potential of AI could be the key to improving big data internal and external productivity challenges across the biopharmaceutical R&D industry.

Deloitte has already noted in other reports that digital technologies, automation tools and solutions based on patient experience can reduce the need for manual activities in the sector, resulting in savings in time and costs.

All in all, the biopharmaceutical industry is on the verge of large-scale disruption, driven by data, advances in AI, analytics and patient-centered care. R&D spending is rising in certain areas of the sector such as oncology and rare diseases. In the last year, 39% of those surveyed by the report said they focused their investment on R&D in oncology, while a third of those surveyed did so for rare diseases.

However, a turnaround in investment is expected in the future. Transforming R&D productivity requires companies to change the way they work, as well as their partnerships and collaborations, the study concludes.


(Featured image by geralt via Pixabay)

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Eva Wesley is an experienced journalist, market trader, and financial executive. Driven by excellence and a passion to connect with people, she takes pride in writing think pieces that help people decide what to do with their investments. A blockchain enthusiast, she also engages in cryptocurrency trading. Her latest travels have also opened her eyes to other exciting markets, such as aerospace, cannabis, healthcare, and telcos.