Abstract

Research and development (R&D) efficiency in the pharmaceutical industry is a measure of the relative value of new and novel products cast against the costs required to make them. For six decades, the R&D efficiency of large pharmaceutical companies has declined to critical levels. Most recently, nearly half of the companies studied were experiencing negative R&D efficiency, or products whose costs to bring to market outweigh the value they offer both commercially as well as to the health and well-being of society (Schuhmacher et al., 2023). One of the most prominent consequences of the inefficiencies plaguing the drug development industry is rapidly increasing prescription drug prices. Large pharmaceutical companies are increasingly outsourcing R&D or engaging in strategic merger and acquisition (M&A) activities to buttress their pipelines and increase their commercial value. Many of the targets for big pharma acquisition are spinoffs from publicly funded university research programs. Notwithstanding the relationship between academic research institutions, their spinoffs, and pharmaceutical companies, little is known about how the R&D efficiency at the university level compares with the published results of big pharma. This study cures that gap through a systematic review of the publicly available literature and websites that correspond with the various measures of R&D efficiency. The findings of that analysis suggest that R&D efficiency for drug development at universities is consistent with the literature coming from large pharmaceutical companies. The works-in-progress (WIP), trial success rates, and length of clinical trials are all consistent with their pharmaceutical analogs and share their difficulties. There is a difference in trial duration where academia performs more slowly than the literature. These findings also show that the out-of-pocket costs of clinical trials are a relatively negligible portion of the overall price of generating a new drug (2%). Finally, this study reveals certain top and bottom performers in clinical trial research in academic research institutions.

Library of Congress Subject Headings

Drugs—Research—United States; Drug development—United States; Pharmaceutical industry—United States; Universities and colleges—Research—United States

Date of Award

2025

School Affiliation

Graduate School of Education and Psychology

Department/Program

Education

Degree Type

Dissertation

Degree Name

Doctorate

Faculty Advisor

Abraham Song

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