R&D Returns Shrink to Lowest Level in Decade, Analysis Finds

Drug companies’ returns on R&D investments have sunk to their lowest level since 2010 and analysts at Deloitte attribute the decline mostly to the soaring costs of clinical trials.

The 12 largest drug companies were expected to see an average of 1.9 percent return on every dollar invested in R&D in 2018 — the lowest percentage since Deloitte began analyzing the data in 2010. Returns fell for smaller drug companies, too — from 12.5 percent last year to 9.3 percent this year.

R&D returns have fallen steadily over the past decade—the average rate was about 8.2 percent in 2010. Clinical trial costs have nearly doubled since 2010, Deloitte says.