Root Cause Analysis of High Research and Development Costs in Pharmaceutical Industry

High Research and Development Costs

• Regulatory Requirements
  • Rising Compliance Costs
  • Expensive audits and inspections
  • Multiple country-specific trials
  • Complex Approval Processes
  • Frequent regulatory changes
  • Lengthy documentation
• Clinical Trials
  • Trial Design Complexity
  • Long trial duration
  • Large sample size requirements
  • Patient Recruitment Challenges
  • High dropout rates
  • Limited patient pool for rare diseases
• Technology & Infrastructure
  • Poor Data Management Systems
  • Cybersecurity investments
  • Expensive clinical data platforms
  • High Cost of Laboratory Equipment
  • Specialized manufacturing facilities
  • Advanced imaging and testing tools
• Human Resources
  • Training and Development Costs
  • Advanced technical training
  • Specialized regulatory training
  • Scarcity of Skilled Scientists
  • Global competition for expertise
  • High salaries to attract talent
• Market & Financial Factors
  • Pressure for Innovation
  • Competitive pipeline pressure
  • Investment in novel therapies
  • High Risk of Drug Failure
  • Cost of failed compounds absorbed
  • Low success rate from discovery to market
• Organizational & Process Inefficiencies
  • Inefficient Project Management
  • Delays in decision-making
  • Poor portfolio prioritization
  • Redundant Research Efforts
  • Lack of knowledge sharing
  • Duplication of studies across teams

Suggested Actions Checklist

Here are some corrective actions, preventive actions and investigative actions that organizations may find useful:

• Regulatory Requirements
  • Rising Compliance Costs
    • Corrective Actions:
    • Streamline audit preparation processes; negotiate with regulatory bodies for phased inspections.
    • Preventive Actions:
    • Implement standardized templates and checklists for regulatory submissions; centralize compliance documentation.
    • Investigative Actions:
    • Review historical audit and trial cost data to identify cost drivers and inefficiencies.
  • Complex Approval Processes
    • Corrective Actions:
    • Assign dedicated regulatory teams to manage documentation and updates.
    • Preventive Actions:
    • Maintain a regulatory change tracking system to anticipate requirements; train staff on frequent updates.
    • Investigative Actions:
    • Analyze bottlenecks in approval workflows to determine recurring delays.
• Clinical Trials
  • Trial Design Complexity
    • Corrective Actions:
    • Reassess trial protocols to optimize duration and sample size without compromising data quality.
    • Preventive Actions:
    • Develop standard trial design templates and guidelines for future studies.
    • Investigative Actions:
    • Conduct post-trial reviews to identify design elements causing delays or inefficiencies.
  • Patient Recruitment Challenges
    • Corrective Actions:
    • Enhance patient engagement strategies, including outreach programs and incentives.
    • Preventive Actions:
    • Build partnerships with patient advocacy groups and expand recruitment channels.
    • Investigative Actions:
    • Analyze historical recruitment data to identify factors contributing to dropouts or slow enrollment.
• Technology & Infrastructure
  • Poor Data Management Systems
    • Corrective Actions:
    • Upgrade clinical data platforms and cybersecurity measures; implement centralized data repositories.
    • Preventive Actions:
    • Establish robust IT governance and periodic system audits; maintain regular software updates.
    • Investigative Actions:
    • Review past data breaches, downtime, or inefficiencies to identify systemic weaknesses.
  • High Cost of Laboratory Equipment
    • Corrective Actions:
    • Optimize utilization of existing equipment; lease high-cost machinery where feasible.
    • Preventive Actions:
    • Standardize equipment procurement procedures; evaluate cost-benefit before new acquisitions.
    • Investigative Actions:
    • Audit equipment usage and maintenance logs to identify underutilization or inefficiencies.
• Human Resources
  • Training and Development Costs
    • Corrective Actions:
    • Prioritize critical training programs and optimize training schedules.
    • Preventive Actions:
    • Develop online learning modules and internal knowledge-sharing platforms.
    • Investigative Actions:
    • Assess historical training effectiveness and costs to identify high-impact programs.
  • Scarcity of Skilled Scientists
    • Corrective Actions:
    • Expand recruitment efforts, including international talent pipelines; offer retention incentives.
    • Preventive Actions:
    • Create succession planning and talent development programs to reduce dependency on external hires.
    • Investigative Actions:
    • Analyze turnover and recruitment data to identify skill gaps and recruitment bottlenecks.
• Market & Financial Factors
  • Pressure for Innovation
    • Corrective Actions:
    • Prioritize projects with higher probability of success; allocate resources strategically.
    • Preventive Actions:
    • Establish structured pipeline evaluation criteria; diversify research portfolio to manage risk.
    • Investigative Actions:
    • Review past innovation initiatives to identify factors causing delays or resource drain.
  • High Risk of Drug Failure
    • Corrective Actions:
    • Implement go/no-go decision gates at critical stages; optimize compound selection process.
    • Preventive Actions:
    • Use predictive modeling and early-stage screening to reduce failures.
    • Investigative Actions:
    • Conduct failure analysis of past compounds to identify recurring risk factors.
• Organizational & Process Inefficiencies
  • Inefficient project management
    • Corrective Actions:
    • Reorganize project teams and assign clear accountability for timelines.
    • Preventive Actions:
    • Standardize project management frameworks and portfolio prioritization processes.
    • Investigative Actions:
    • Review previous project delays to identify root causes in decision-making or workflow.
  • Redundant research efforts
    • Corrective Actions:
    • Merge overlapping projects and consolidate research documentation.
    • Preventive Actions:
    • Implement knowledge-sharing platforms and cross-team collaboration protocols.
    • Investigative Actions:
    • Audit past research projects to detect duplication and communication gaps.