Drugmakers that develop and launch new products faster than their peers perform consistently better across a number of business measures, earn higher revenues, and have lower development costs, according to a newly-completed analysis from the Tufts Centre for the Study of Drug Development.
Between 2000 and 2005, drugs developed by the fastest companies each gained an average of $1.1 billion in incremental prescription revenue and saved a median of $30.0 million in out-of-pocket development costs, compared to those of the slowest drugmakers. The findings are published in the September/October Tufts CSDD Impact Report.
"Speed demon companies - the fastest drug developers - are consistently implementing efficient R&D practices across their portfolios," said Ken Getz, senior research fellow at Tufts CSDD and co-author of the study. "These companies have far less development and regulatory time variability, kill projects sooner, and are better at setting resource priorities. In a word, being fast on one project is good, but being consistently fast across the portfolio of projects is substantially better," noted Dr Getz.
According to the report, Bayer, AstraZeneca, Allergan, Boehringer Ingelheim, and Merck & Co are the five fastest development companies for the 2000-05 period; each was able to shorten its development and regulatory cycles by as much as 17 months, compared to average performing drug developers. To assess the fastest developers, Tufts evaluated 104 approved drugs for 29 firms.
"Given the high direct cost of development and the substantial opportunity cost for a day of delay in reaching the market, speed and efficiency are central strategic objectives," Dr Getz said. "This is especially important today with steadily rising R&D costs, lengthening development and regulatory approval times, ever more complex clinical trials, and stubbornly low success rates of drugs moving through clinical development."
The Tufts CSDD study also found that: as a group, the fastest third of companies reduced their median development speed 20% (from 66.5 months in 1994-99 to 53 months in 2000-05) and held regulatory cycle times flat at about 13 months in the 2000-05 period.
In each therapeutic area where they compete, speed demon companies beat the median overall cycle time more than 83% of the time. Meanwhile, fastest companies terminate 56% of discontinued projects in Phase I clinical development versus 36% for slowest companies.
The analysis found that a one-day speed advantage typically saves $37,000 in out-of-pocket development costs and nets an additional $1.1 million in daily prescription revenues for an average performing drug.