Global Biopharmaceutical R&D and Investment Trends

Looking at the recent global drug R&D trends, the growth rate of companies' R&D spending is expected to slow down due to a drop in R&D investment efficiency. Investment efficiency has been decreasing since 2000, and it is analyzed that this is due to governments' policy of lowering drug prices, increasing development costs and periods, and intensifying competition.

Biopharmaceutical R&D Trend

The pharmaceutical industry is a technology, capital, and device-intensive industry that takes high R&D costs and more than a decade from R&D to successful new drug development and product commercialization. According to a recent report, the cost of marketing a new drug jumped from $1.19 billion in 2010 to $2.17 billion in 2018.

12 Big Bio Companies

12 Big BiosPharmaceutical companies' R&D returns fell to a nine-year low from 10.1% in 2010 to 1.9% in 201, and the cost of launching new drugs has increased to a record level, but the maximum sales per new drug has decreased by half compared to 2010. However, specialized bioPharmaceutical companies have high pipeline value despite high development costs, and expect to outperform large companies.

Growh Expected to Slowdown

In conclusion, global pharmaceutical companies' R&D spending will continue to increase, but its growth is expected to slow down. In other words, R&D expenditure is expected to continue to increase from 2018 to 2024, but the annual average growth rate is expected to be 3.1%, slowing from the growth rate of 3.6% between 2010 and 2017. 

Emerging virtual business models that outsource all phases of drug development to improve drug development efficiency The global CRO market grew to 12.8% annually between 2016 and 2021 for efficient research and development of biopharmaceutical companies, and the demand for outsourcing (CDMO) services is increasing not only for small and medium-sized companies with no or insufficient research and production facilities but also for large companies. In addition, patient-centered customized treatment and digitalization of clinical trials are also leading to the expansion of outsourcing in the clinical sector.

Conclusion

As mentioned earlier, the CMO market continues to grow as partnerships with pharmaceutical consignment producers (CMOs) to produce biopharmaceuticals, and CMO companies are shifting to a business model that integrates CDMO services such as candidate material derivation and development to become one-stop solution providers. Manufacturing capabilities are increasingly important with the growth of biopharmaceuticals and customized medicine, but only one-third of all manufacturing is estimated to take place in-house after development or commercial launch, and pharmaceutical companies need to focus on securing a stable and efficient supply chain. In addition, as the cell therapy and gene therapy market grows, related demand is expected to increase, and CMO and CDMO are expected to play a strategic and essential role in the global supply chain.