National Academy of Medicine

Disruptive Innovation and Transformation of the Drug Discovery and Development Enterprise

By Bernard H. Munos and John J. Orloff
July 20, 2016 | Discussion Paper

Declining or stagnant research and development (R&D) productivity has led many observers to argue that the current paradigm for drug discovery and development requires disruptive innovation to break out of a current crisis by identifying and rapidly bringing new discoveries to market. The cost of bringing a new drug to the market has risen to approximately $2.6 billion over the last decade, up from the previous decade’s estimate of $1.5 billion, and the overall likelihood of receiving regulatory approval from Phase I for all drug development candidates is 9.6 percent. Despite increased investment, the number of new therapies and improvements to human health as measured by the growth in life expectancy have remained relatively constant over the past 50 to 60 years. Sustained competition from generic manufacturers and overall negative public reactions to costly prescription drugs only add to the complex challenges facing large pharmaceutical companies (“industry”) today.

Critics cite the need for the industry to produce more and better products and affordably innovate if it hopes to survive. To further assess the challenges and reveal potential opportunities, we undertook a qualitative research project to engage thought leaders and key stakeholders within the biomedical research ecosystem. Through soliciting the diverse viewpoints of these leaders, we gained insight into their unique perspectives on the state of the pharmaceutical and biomedical research industries, what could or should change, how those changes might occur, and, generally, what the future might hold.




Suggested Citation

Munos, B. H. and J. J. Orloff. 2016. Disruptive Innovation and Transformation of the Drug Discovery and Development Enterprise. NAM Perspectives. Discussion Paper, National Academy of Medicine, Washington, DC. doi: 10.31478/201607c


Disclaimer: The views expressed in this paper are those of the authors and not necessarily of the authors’ organizations, the National Academy of Medicine (NAM), or the National Academies of Sciences, Engineering, and Medicine (the National Academies). The paper is intended to help inform and stimulate discussion. It is not a report of the NAM or the National Academies. Copyright by the National Academy of Sciences. All rights reserved.