The pharmaceutical industry is experiencing a deepening productivity crisis. The industry’s preferred escape mechanism from this predicament has been to increase investment in current business activities – primarily R&D and sales – to sustain productivity levels or, ideally, to exploit economies of scale. This has been implemented through organic growth of critical resources and/or M&A. The fact that productivity continues to decline after a decade of vigorous growth in investment levels, and against a background of increasing company size, bears testament to the fallibility of this strategy.
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