The pharmaceutical productivity gap – Incremental decline in R&D efficiency despite transient improvements

• Rising R&D expenditures reflect ongoing incremental efficiency decline. • Recent stabilization in R&D efficiency may not indicate structural reversal. • Sustained turnaround in R&D efficiency remains uncertain. • Rising late-stage attrition signals lower future R&D productivity. • Structural changes are essential to address pharmaceutical innovation challenges. Rising research and development costs, currently exceeding $3.5 billion per novel drug, reflect a five-decade decline in pharmaceutical R&D efficiency. While recent reports suggest a potential turnaround, this review offers a systems-level analysis to explore whether this marks a structural shift or transient reversal. We analyzed financial data from the 200 largest pharmaceutical firms, novel drug approvals, and more than 80 000 clinical trials between 2012 and 2023. Our analysis revealed that despite recent stabilization, the pharmaceutical industry continues to face challenges, particularly due to elevated late-stage clinical attrition, suggesting that a sustained turnaround in R&D efficiency remains elusive.