Declining return on research and development spends and rising healthcare costs pose a big challenge for pharma industry globally, a top executive of a leading multinational pharma company said on Tuesday.

Terming it as a massive conundrum, head-Global Development Operations of Novartis, Switzerland, Badhri Srinivasan said healthcare costs continue to go up even as different stakeholders continue investing big time on innovation. “We are in a time of massive disruption and innovation. You can hear it, see it all around us,” he said, adding how cell therapy and gene therapy are being talked about and AI and Machine Learning have come to stay.

“Yet, we are faced with a situation of declining R&D productivity. In 2018, R&D productivity was 3.2% and projected to be zero by 2020. It means for every dollar spent you get a dollar back, don’t get anything more,” he told a full house at BioAsia 2019. The three-day event that opened Monday evening has ‘Disrupt the Disruption’ as its theme.

It is a very strange situation, he said. “We have on our hands a massive conundrum… [a] situation where we have all kinds of innovation, everywhere we look… we see money being spent on innovation, yet something is not adding up, something is not working out.”

Underscoring the need to derive more value and innovate differently, Mr. Srinivasan called for efforts to bridge the gap between clinical science and healthcare by harnessing the power of technology. Such a move, he added, assumed significance as only 2% of the patients worldwide and 2-3% of investigators participated in clinical research.

The situation is more imbalanced, pronounced in countries like India where the need for healthcare is there but access is lacking. However, for medicines to be supplied at reasonable prices, this gap has to be bridged. It can be done with a focus on innovation that matters at the intersection of humans and machines, he said, calling for use of predictive analytics. Novartis conducted 500-600 trials every year, touched about 80,000 patients and 40-50,000 doctors, investigators.

In a brief interaction later, he said regulators globally are open to innovation though there still are those who are very strict. “I think there is lot of appetite with the regulators… there is lot of working together which is happening between the regulators and pharma industry.”

On clinical trials in India, he said the process is getting better. Regarding Novartis’ expansion of its development centre in Hyderabad, he said, without sharing specifics, it is “progressing well... it is expanding as we speak.”