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MEASURING AND COMMUNICATING THE CONTRIBUTIONS OF RESEARCH* R. E. FAUSTi AND R. H. STEVENSONt Schnee and Caglarcan [1] recently reported on the changing pharmaceutical R&D environment and assembled a number of facts describing historical trends and current patterns, including the following: (a) measured in terms of manyear effort, more than 95 percent of all pharmaceutical research carried out since the dawn of history has occurred since 1935; (b) in 1977 the U.S. ethical pharmaceutical industry will spend over $1.0 billion for R & D, a 20-fold increase over the past 25 years; (c) less than 2 percent of the pharmaceutical industry's R&D funds are provided by the government, compared with 42 percent for American industry in general; (d) the R&D expenditures of the U.S. pharmaceutical manufacturers amount to about 1 1 percent of the industry 's net sales, a figure five times greater than the 2 percent average for U.S. industry as a whole; and (e) the number of firms with research budgets over $20 million has increased from eight to 15 over the period 1968-1973, reflecting the increasing costs involved in drug research. All of these observations attest to the tempo of change and high costs associated with modern biomedical and pharmaceutical research. Drug development today is under constant scrutiny as it faces challenges from diverse influential groups with various motives and goals. The efficiency of R & D and the cost of drug research are being questioned despite the fact that (a) the drug portion of the total health-care dollar is relatively small; (b) since 1935 the U.S. drug industry has led the world in medical innovations and new products; and (c), if we assess R & D output, vitality, and contributions in broad and meaningful terms, there are significant accomplishments and major positive impacts on the health and well-being of the citizenry. *Presented at the Management Science Conference for the Pharmaceutical Industry, Purdue University, September 29-October 1, 1976. tDirector, research planning and development, Hoffmann-LaRoche, Inc., Nutley, New Jersey 07110.¿Research planning manager, Hoffmann-LaRoche, Inc., Nutley, New Jersey 07110.© 1978 by The University of Chicago. 0031-5982/78/2102-0010$01.00 Perspectives m Biology and Medicine · Winter 1978 | 301 Powerful environmental forces are shaping and shaking the pharmaceutical industry. We are at a pivotal point. Unless we can meaningfully communicate research philosophy, objectives, and contributions, then negative opinions and pressures may result in the diversion of resources away from biomedical and drug research to "more productive " corporate ventures and public concerns. Research-Productivity Yardsticks How can we measure the R&D productivity of a particular pharmaceutical company or the entire industry? What yardsticks are realistic, and which are most significant in influencing public and corporate policies affecting the process of drug discovery and innovation? One can assess R&D output in terms of compounds synthesized, screening tests performed, new drug candidates generated, patents received , scientific papers published, investigational new drugs (IND) and new drug applications (NDA) filed, products marketed, and sales and/or profits achieved. In addition, work undertaken to defend and expand the market position of existing products should also be considered. However, one of the problems encountered in examining these various productivity indicators is the fact that most of them are measures of R & D activity rather than output. Certainly the number of new products marketed and sales achieved are more meaningful indicators of success than the number of compounds synthesized or patents filed. Of course the ultimate measure of research achievement is the contribution of the R&D function to corporate profitability. It is essential, however, that those who use the profit yardstick and who make key decisions influencing research commitments recognize that a realistic time frame should be employed, not 1 , 5, or even 10 years but more reasonably 15-20 years, for the complexity of modern biomedical and drug research requires such time perspectives [2]. We have noted the trend among economists, political entrepreneurs, consumerists, and certain others who study the drug industry to relate investments in R & D with the generation of new single chemical entities (NCEs). They tend to emphasize NCEs as the primary output of research and address all issues on the basis that from a high of40-50 NCEs yearly in the 1951-1960...


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