R&D in the Healthcare Sector—Productivity and Leadership

Demographics

Findings are based on 118 responses from:

• CEOs, chairmen and board directors (45%)
• Heads of R&D, heads of research and heads of development  (28%)
• Heads of human resources (10%)

Other participants include:

•Chief medical officers • Heads of science & technology • Heads of marketing • Heads of business development • Heads of regulatory affairs

Company size

• 34% of respondents are from companies with more than 5,000 employees
• 19% of respondents are from companies with between 1,000 and 5,000 employees
• 11% of respondents are from companies with between 100 and 1,000 employees
• 36% of respondents are from companies with less than 100 employees

Geographic area

• Respondents based in Europe (49%)
• Respondents based in North America (51%)
• Respondents with a global focus (19%)

Executive Summary

Unmet Medical Needs

• Addressing unmet medical needs is by far the top priority for improving R&D productivity for all respondents, and the main driver for heads of R&D

Speed to Market

There are three main steps companies will take to increase speed to market:

1. collaborate earlier and more closely with key external stakeholders;
2. improve the decision-making processes and /or processes in R&D operations; and
3. target smaller subpopulations of patients requiring smaller and shorter trial programmes

R&D Costs

There are two main steps companies will take to reduce R&D costs relative to expected revenues:

1. focus on new approaches to patient selection and study design; and
2. make greater use of biomarkers and techniques of translational medicine in the early research phases

More than half of CEOs and heads of R&D expect to outsource everything considered non-core to the proprietary specialisms

Innovation

There are three main priorities for companies in taking innovative steps to address unmet medical needs:

1. target unmet needs/including novel targets with new proprietary compounds initially in niche indications;
2. foster an open innovation model and partner with academia/other companies rather than compete, particularly for large companies
3. focus on personalised therapies and the convergence of diagnosis and therapy through technology and innovation of care

End-User Focus

• The focus for end-users is jointly to deliver the best clinical outcomes and produce data to support unique claims

R&D Organisation

• Centres of excellence are very likely to be created in the R&D organisational model, and the internal research function is very likely to be reduced

Large organisations will

1. seek greater integration of R&D areas;
2. strive for greater empowerment and less hierarchy and
3. create centres of excellence around therapeutic areas and/or technologies

Smaller organisations will

1. reduce the size of the internal research function;
2. create centres of excellence around therapeutic areas and/or technologies and
3. strive for greater empowerment and less hierarchy

The focus for CEOs in all companies is to reduce the size of the internal research function. This links to the finding that half of CEOs expect to outsource everything considered non-core to the proprietary specialisms

R&D Leadership

• Current R&D leaders will need to adapt and expand their skills and new leaders with more business acumen are anticipated
• The profile of R&D leaders will shift significantly towards entrepreneurial drive and competitiveness

All see entrepreneurial drive as more important in the future. Relationship building and influencing skills are considered more important in larger organisations.

R&D Hiring

• To increase R&D productivity, external hiring will grow significantly, including outside the healthcare industry

A significant majority of CEO, board level and heads of R&D expect external hiring to be higher in the future

By contrast, only a small percentage of HR heads expect external hiring to run at a higher level in the future.

Those who expect organisations to hire internally less than they do today are split almost equally among smaller and large organisations. These respondents are primarily heads of R&D, followed by CEOs, with a very small number of HR heads

Addressing unmet medical needs is the main driver for improving R&D productivity

Number of respondents ranking each strategy as the most important

Speed to market: three dominant steps

Percentage of respondents who agree ‘fairly strongly’ or ‘very strongly’ that to increase speed to market companies will need to…

Reducing R&D costs: two main steps

Percentage of respondents who agree ‘fairly strongly’ or ‘very strongly’ that to reduce R&D costs companies will need to…

Innovation: three main priorities

Percentage of respondents who agree ‘fairly strongly’ or ‘very strongly’ that to drive innovation companies will need to…….

Innovation: three main priorities

Percentage of respondents who agree ‘fairly strongly’ or ‘very strongly’ that to drive innovation companies will need to…

End-user focus

Percentage of respondents who agree ‘fairly strongly’ or ‘very strongly’ that to increase end-user focus companies will need to…

R&D Organisational Model

Percentage of respondents answering that it is ‘very likely’ that the R&D organisational model will change and that companies will...

R&D Organisational Model (continued)

Percentage of respondents answering that it is very likely that organisations will…

Large organisations will (i) seek greater integration of R&D areas and (ii) strive for greater empowerment and less hierarchy and (iii) create centres of excellence around therapeudic areas and/or technologies.

Smaller organisations will (i) reduce the size of the internal research function; (ii) create centres of excellence around therapedutic areas and/or technologies and (iii) strive for greater empowerment and less hierarchy.

R&D Leadership

Percentage of respondents who consider it ‘very likely’ or ‘likely’ that to achieve their goals of increased productivity, companies will…

R&D Leadership

Percentage of respondents who see these competencies being more important than today (blue), or about the same (red)

Hiring

Percentage of respondents who see external hiring taking place...

Hiring

To increase R&D productivity, respondents expect external hiring to take place...

Appendix I: Headlines with percentage figures

The organisational model

82% consider it quite likely or very likely that the internal research function will be reduced, with nearly 42% believing that it is very likely that the internal research function will be reduced. Just 1% expect the internal research function to expand.

80% expect organisations to strive for greater empowerment and less hierarchy.

Greater integration of the various functional areas of R&D is still high on the agenda, with nearly 90% of respondents expecting organisations to continue to seek greater integration.

The required experience and knowledge for R&D leadership

More than 75% of our participants think that it is likely (52%), or very likely (24%) that current R&D leaders will be asked to adapt and expand their skills to lead an evolutionary transition to a new R&D model.

As many as 64% say it is likely (47%) or very likely (17%) that organisations will replace current R&D leaders with leaders offering greater business acumen based on cross-functional career development (e.g. combining Commercial, Human Resources and Supply Chain experience).

Nearly 70% expect companies to build stronger differentiation between scientific leadership and operational leadership in top appointments, as well as career planning. [19% consider it very likely and 49% consider it likely]