R&D Expense per New Drug Developed
This PDF report includes benchmarking data (in a visual, chart-based format), an comprehensive KPI definition, characteristics of high performers and technical details on measuring R&D Expense per New Drug Developed. Purchase and download this easy-to-understand, presentation-ready report immediately to compare performance levels, set attainable performance targets, and push towards best-in-class performance for this KPI.
What is R&D Expense per New Drug Developed?
The total expense incurred by a Pharmaceutical company's Research & Development (R&D) Department divided by the number of new drugs developed over the same period of time. R&D expense includes labor, investments, etc.
Why should R&D Expense per New Drug Developed be measured?
Research & Development (R&D) Expense per New Drug Developed measures the average R&D expense for each new drug developed by the pharmaceutical company over the same period of time. High R&D costs can demonstrate inefficient practices within R&D operations (i.e., employee productivity), costs associated with drugs that never make it to the marketplace (i.e., drugs that fail during clinical trials and are thus never sold) or an overstaffing of the R&D function (i.e., analysts, researchers, etc.). Since pharmaceutical R&D expenses are invariably linked to how much the drug costs in the marketplace, exorbitant R&D expenses can drive up the prices of new drugs making them that much more difficult to sell to customers. Such unmanageable prices can therefore expose the company to reputational and financial risks born from not being able to pay off its liabilities on time and high degrees of customer dissatisfaction.
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