Today, I ran across someone on LinkedIn who has the best grasp of declining R&D productivity from a macro level that I’ve ever seen. Kelvin Scott has a series of very insightful articles such as the ones below and a fantastic presentation.
I highly recommend you take a look though he’s more pessimistic than is warranted (he thinks that the industry is doomed). Many of his observations are on the mark, in that things cannot continue on the same trajectory. In my view, that means that they won’t–I think there will be structural changes in pharmaceutical R&D that will reverse the trends, because no one is going to be able to run companies forever with a negative return on investment.
For example, he discusses how there are too many companies chasing the same target that drives ROI down for everyone. That is probably true, and of course that means that eventually some of the companies will go out of business. When that happens, returns will rebound.