Research and development (R&D) costs incurred by pharmaceutical majors remained at blockbuster level in 2016, but very few blockbuster drugs were brought to market, says a report by Deloitte using data provided by GlobalData.

Titled ‘Measuring the return from pharmaceutical innovation 2016: Balancing the R&D equation’, the report is the seventh annual report published by Deloitte Centre for Health Solutions.

The report states that return on investment fell in 2016, despite costs being 30% higher than those in 2010 at $1.54bn.

The figures point towards a growing imbalance between investment and returns as blockbuster costs are not yielding blockbuster revenues.

Approximately 21 pipeline drugs are currently expected to attain blockbuster status, with annual sales of at least $1bn.

"The report states that return on investment fell in 2016, despite costs being 30% higher than those in 2010 at $1.54bn."

The number of pipeline drugs in 2010 was 55, demonstrating the disparity in revenue expenditure and returns.

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The report highlights the risk involved in drug discovery and development and the need to produce differentiated drugs. The complex underlying molecular biology of certain indications often results in failure despite the large amount of investment made.

An industry-level analysis of a number of companies in the market using company and product data and forecasting analysis was carried out for the report. The data was provided by GlobalData database and consulting teams, adds Sean X. Hu, PhD, MBA, GlobalData’s Senior Vice President & Head of Consulting in the US for Pharmaceutical and Diagnostics Industries.

The report also provides key insights for biopharmaceutical companies to ascertain the key drivers of a company’s overall financial performance and the steps needed to improve return on R&D investment.