| The success of large pharmaceutical companies primarily reflects their development and marketing of blockbuster drugs - products that achieve annual revenues in excess of US$1 billion. This has led companies to follow growth strategies that rely heavily on finding new blockbusters, rightly believing that these products can offer significantly higher returns than their lower value counterparts. Increasing sales potential is critical as the average cost of developing a new molecular entity is currently approximately US$637 million. Coupled with the fact that only one in 5,000 to 10,000 lead compounds eventually reaches market after 14 years in R&D and regulatory reviews, a drug with annual revenues above US$1 billion is clearly able to recover a greater proportion of these costs. This improves R&D productivity and contributes to company margin growth. |
