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R&D in Biopharma: Doing More with Less

The science and organizational dynamics are challenging, but clear strategies and Smart Simplicity can improve pipelines, launches, and productivity.

Research and development is the lifeblood of the biopharma industry and the ultimate source of the economic value it creates. R&D allows companies to generate new products that will eventually lead to growth and save lives. The ultimate importance of R&D is noted clearly in the more than 30% of market capitalization attributable to the value of the most successful biopharma company pipelines.

Advances in science open up new opportunities for growth—and challenges to optimizing a productive R&D organization. Biopharma companies first and foremost must construct R&D portfolios that will drive value creation. This requires a thorough look at their organization's ability to be first-in-class or truly best-in-class in the therapeutic areas where they decide to play. Strategically sourcing external innovation through partnerships and licensing is another powerful lever for driving R&D productivity.

The most successful R&D organizations have a deep understanding of their distinctive capabilities and leverage these to gain competitive advantage. A strong focus on operational excellence and innovation are critical to ensure shorter time-to-market.

Effective use of these strategies also helps companies maintain R&D spending levels and “do more with less.” Looking beyond the lab, the most successful biopharma companies have been able to overcome the critical organizational dynamics that have been a barrier to R&D productivity. Through approaches that leverage "Smart Simplicity," these organizations have increased productivity despite flat R&D investments through more targeted drug development, improved decision making, and sharper prioritization, as well as through better collaboration with the commercial organization.

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