If economic crises teach one thing, it is that buoyant sectors often do not pay much attention to their costs, that is, when the high level of income makes one forget the treasury tensions, many companies relax and get carried away, in such a way that when things go wrong, all their shame comes to light. This means that the possibilities for optimizing costs in these sectors are very wide compared to more depressed sectors that have already been squeezing the lemon for years.
Although there are different cases, one of the traditionally buoyant sectors, measured according to its financial capacity, is the pharmaceutical, especially if we look at the aggressive policies of mergers and acquisitions that have shaped a world scenario dominated by large multinational companies.
Going into the matter, if we gutted the conventional processes of the pharmaceutical sector, we could draw three main areas of action: research and development of drugs (R&D / R&D), their production and, finally, their commercialization. Apart from these areas, there is a whole series of support activities: administrative, legal, logistical, etc., but they are not the subject of reflection on this occasion.
Marketing costs are widely studied in different disciplines and are common to many sectors of activity, with practically standardized ratios such as the analysis of profitability per commercial, return on sales compared to their remuneration, etc. The same happens with production costs, where we usually talk about productivity, MOD cost, bottlenecks, and a long etcetera.
The R & D / R & D area is not as frequent in the industry as it may seem and, although it can be estimated as a cost center, cost reduction strategies are usually aimed at making budget cuts based on the global budget of the company.
However, within this area there are ample possibilities for improvement and even more so in a sector such as pharmaceuticals, where spending / investment in research and product development reaches figures that are difficult to imagine for any other type of industry and is especially strategic, both for the volume of investment it represents and the significance of failed investments at the competitive level.
In a market in which generics have entered with great force, the driving companies at the innovation level, whether large or small (less and less), frequently consider the profitability of their investment in R & D / R & D, which by another part is essential for science to continue moving towards the production of ever better solutions.
How to reduce costs in research and development of new drugs?
The process of research and development of new drugs has a series of characteristics well known to professionals in the sector. It is a long process, lasting between ten and fifteen years, expensive, since the cost of research for a new drug can exceed eight hundred million euros, and risky, according to statistics, only one in ten thousand molecules investigated it can become an economically viable product.
Cost reduction can therefore be considered in different scenarios. If we want to reduce research time, one line is to work on drugs that already exist, for example improving our own products.
To reduce the cost of development, we have the possibility of working with techniques that reduce different costs of the process. Although it may seem controversial, since many companies may believe that there is no room for improvement at this point, in many cases the design of the research process or the clinical trial can represent significant savings in the subsequent development of the drug. Likewise, the use of modeling techniques can represent savings close to 50% through the minimization of sampling costs, etc.
Another important way of saving is the recovery of discarded research. It is common that some drugs that are rejected, either because of the results obtained internally or because they are rejected for different reasons by the government body that regulates drugs, are forgotten. The problem with these drugs is that by the time they are rejected or discarded, companies have already made a huge outlay on their research and development. There are many investigations that have been discarded due to errors in the investigation process and that could be recovered through a new approach to it. This would mean taking advantage of the know-how that many companies have kept in the drawer believing that their research was already a non-recoverable cost, which,If we quantify it in economic terms, it would give us an exorbitant amount.
Impact of cost savings
Cost savings in the pharmaceutical industry impact on two different economic aspects, that of users, whether final or intermediate (government organizations), who can benefit from lower costs through a reduction in the price of drugs, and of the industry, which can recoup previously lost investments, as well as lower the costs of your R&D / R & D process to obtain a greater benefit from your research.
To these repercussions, already transcendent in themselves, it is necessary to add the importance of not stagnating research, since although the laboratories that abandon it, a priori go to a much more comfortable and cheap terrain, it is also true that they take a A risky path, since they become industries that minimize their added value and, therefore, may end up competing for costs in a market where there are very large companies, which is not exactly the best scenario.
