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Case Study

Trimming costs, pumping up output

An international pharmaceutical company needed to increase its output of new products while lowering costs. Bain devised a new, prioritized approach to R&D that reduced the number of projects by 30 percent, but ensured the company would still meet its goals for the number of new, winning drugs it introduced each year.

  • min read

At a Glance

  • 21% proportion of R&D budget reinvested into priority projects
  • 28% time-to-market reduction

The Full Story

The Situation

PillCo* needed a new R&D strategy to lower costs while increasing output of winning new products.

PillCo, an international pharmaceutical company, was falling short of its goal to bring 2.5 blockbuster NCEs (New Chemical Entities) to market each year.

The company had an extensive R&D project portfolio consisting of 68 projects across 11 therapeutic areas, targeting more than 35 indications. Yet PillCo's R&D process was cumbersome. It lacked appropriate prioritization and clear cut-off criteria. The R&D organization was scattered and lacked cross-functional project management.

In a recent corporate strategy review, PillCo decided to focus resources on just 6 of its 11 therapeutic areas and reduce the R&D budget by 4% of sales over a 5-year period.

Yet management was concerned about achieving its NCE goals at this lower investment level. Bain was asked to redefine PillCo's R&D strategy to maximize the value of its investments.

Our Approach

Bain undertook a four-step process to generate a prioritized set of innovation options and define the resources needed.

Our Recommendations

Bain recommended aligning the PillCo R&D project portfolio with the new therapeutic area focus and maximizing the value of a balanced pipeline.

The Results

Implementing a new R&D strategy allowed PillCo to increase investments in therapeutic areas of focus and substantially improve operations.

 

* We take our clients' confidentiality seriously. While we've changed their names, the results are real. 

 

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