R&D money is under the gun. Investors and even regulators are questioning the return on investment. The departing head of the European Medicines Agency (EMA) says much of the $85 billion spent on drug development is wasted. “How many [new drugs] are approved each year – six, seven eight, nine maybe? If the value of these few new drugs is worth 10, maybe 20 billion U.S. dollars, then where is the remainder of the $85 billion going? Maybe we could use this $60 billion in a better way?” asked Thomas Lonngren, who has run EMA for ten years.
The correct analysis would be to perform a pareto to determine where the $60 billion went. Without this, we do know a lot of money is spent on r&d projects that don’t develop a successful product and thereby lead to business success. Many projects continue to drain resources when they will not provide the business advantage required.
A simple solution can make r&d more effective. Prove the technology can perform, and meet the critical new customer requirements. And ensure the technology with those customer requirements provides the bsuiness advantage that is the raison d’etre of the new technology. Do this before sinking the big dollars into the technology. Simple but powerful.
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