The Attrition-Based Pipeline

If a company want its internal R&D to supply new drugs to market, year-on-year, it must account for attrition in its pipeline.  As noted in our section on Attrition, Figure 1 outlines the high attrition in the industry.

 

 

Figure 1, Attrition Across the Pipeline. 1

To adequately account for attrition, the R&D organization should, in principle, make sure that each stage is at least larger than the subsequent stage by the percentage of attrition that typically occurs at each transition.  Figure 2 shows a hypothetical pipeline, using industry attrition, that would provide one launch in a given year.

industry-attrition-big
Figure 2, Hypothetical Pipeline based on Industry Attrition and one Launch per year (click on image to enlarge).

In this scenario, the Discovery pipeline would need to be considerably larger than the Development pipeline to keep the Development pipeline filled.  In fact, 78% of the project in the entire pipeline would need to be in Discovery.

Unfortunately, the pipeline is not scalable – if 4 launches are needed due to future patent expiration of marketed blockbusters, a company with this hypothetical pipeline would need to begin with 228 projects in Target Discovery, Figure 3. One would wonder if the company would have the capacity for such an increase in the pipeline.  Historically acquistions made up the difference, but reducing attrition would have dramatic impact. “All it takes is one good drug”.

 

Figure 3, Expanded hypothetical Pipeline to provide 4 launches at steady state, based on Industry Attrition and one Launch per year (see Figure 1).

One could call the attrition-based pipeline a sustainable pipeline.  As will be discussed in our section on The Sustainable Pipeline Myth the big bio/pharmaceutical companies seem to have abandoned the sustainable pipeline some time ago.

  1. Data from leading pharma: “Rediscovering the Sweet Spot in Drug Discovery”, David Brown and Giulio Superti-Furga, Drug Disc. Today, 8, (23) 106-1077 (Dec. 2003). Gilbert et al. show essentially the same level of pipeline attrition 13-Preclinical projects, 9-Phase 1 projects, 5-Phase 2 projects, 2-Phase 3/Launch projects to 1 Drug Launched – Jim Gilbert, Preston Henske, and Ashish Singh, “Rebuilding Big Pharma’s Business Model,” Bain & Company 01 Nov. 2003, 29 Oct. 2007 http://www.bain.com

     

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