According to recent analysis from the Tufts Center for the Study of Drug Development (Tufts CSDD), drug companies that develop and launch new products faster than their peers earn higher revenues and have lower development costs. Between 2000 and 2005, the fastest companies gained an average of $1.1 billion in incremental prescription revenue and saved an average of $30 million in development costs, as compared with the slowest companies, Tufts CSDD reported.

“Speed demon companies—the fastest drug developers—are consistently implementing efficient R&D practices across their portfolios,” said Ken Getz, senior research fellow at Tufts CSDD and co-author of the study. “These companies have far less development and regulatory time variability, kill projects sooner, and are better at setting resource priorities.”

The study evaluated 104 approved drugs for 29 companies and reported that, Bayer, Astra-Zeneca, Allergan, Boehringer-Ingelheim, and Merck are five of the fastest development companies. In the 2000-05 period, each was able to shorten its development and regulatory cycles by as much as 17 months, compared to average performing drug developers.

“Given the high direct cost of development and the substantial opportunity cost for a day of delay in reaching the market, speed and efficiency are central strategic objectives,” Mr. Getz noted. “This is especially important today with steadily rising R&D costs, lengthening development and regulatory approval times, ever more complex clinical trials, and stubbornly low success rates of drugs moving through clinical development.”

The study also found that: the fastest third of companies assessed reduced their median development speed by 20% and held regulatory cycle times flat at approximately 13 months; in each therapeutic area where they compete, the fast companies beat the median overall cycle time more than 83% of the time; fastest companies terminate 56% of discontinued projects in Phase I vs. 36% for slowest companies. Also, a one-day speed advantage typically saves $37,000 in development costs and nets an additional $1.1 million in daily prescription revenue for an average performing drug.