Boston Consulting Group Quantifies Benefits of Genomic Technologies for Streamlined Drug Discovery
Shedding new light on a growing debate, The Boston Consulting Group (BCG) today issued original research showing the positive economic impact of genomics technologies on pharmaceutical research and development (R&D). The report is the first to closely examine activities along the entire value chain and establishes a new cost estimate of $880 million to develop a novel drug today. The report notes that proper deployment of genomics technologies can result in significant productivity savings of up to $300 million per novel drug.
"Recent predictions of the impact of genomics technologies on the economics of biopharmaceutical R&D have painted the genomics revolution in absolutes. Initially they focused on the seemingly limitless benefits of genomics discovery. More recently they have seesawed to concerns about the elusiveness of productivity gains and the skyrocketing costs of drug development due to the explosion of tools and targets,"said Peter Tollman, a BCG vice president and leader of the firm's biopharmaceutical R&D practice. "As is frequently the case, sober assessment results in a prediction between these extremes. Significant productivity gains can indeed be had, but realizing them requires evaluating judiciously how and where to deploy resources. It also requires implementing the necessary operating-model changes carefully. We offer a framework within which to weigh the costs and likely payoffs of these new technologies." On the basis of its research, BCG believes:
Genomics tools and technologies available today can materially reduce the cost to develop a drug by increasing the efficiency of steps along the R&D process. Companies that make the right strategic decisions and execute effectively could cut up to $300 million and two years from the current drug development process. Drug companies can reduce costs even further by tapping into the information generated by genomics to improve decision-making. Of the total $880 million in drug development costs, 75 percent can be attributed to failures along the way. So reducing failures offers even greater leverage than improving the efficiency of successes. By pursuing disease targets and drug candidates rich in biological, chemical, and metabolic information, scientists and companies can make more accurate choices about the most promising leads to move into clinical development. To illustrate the leverage potential from better decision-making, the report shows that eliminating just one in ten drug targets from discovery research could reduce the cost to develop a new drug by an average of $200 million.
The current BCG publication, A Revolution in R&D: The Impact of Genomics, is the first of a three-part report examining how genomics will affect productivity in pharmaceutical R&D. The second installment of the analysis (to be released toward the end of July) focuses on the impact of genetic approaches, such as disease genetics and pharmacogenetics. The third and final installment looks at the overall implications of these changes for the industry, including the operational and organizational challenges involved in realizing the promise of genomics.
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