Modeling Resource Requirements for Pharmaceutical R&D

OVERVIEW:The task of bringing novel pharmaceutical products to market quickly at reasonable cost is daunting. While both pharmaceutical sales and R&D expenses are on the rise, the latter is outpacing the former. In order to increase top-line revenues, pharmaceutical firms have been employing a range of strategies to supplement the vitality of their R&D portfolios. While these strategies have the potential to increase revenues, they typically increase the demand for development resources that are already in short supply. Two models—steady-state and dynamic—allow R&D managers to estimate these resource requirements accurately and allocate them intelligently.