Forget the scary legal headlines: without precise R&D project time tracking, your pharma company could already be leaking million$ today
Operating in the pharmaceutical industry – where competition is fierce, regulations are potent, and growth is fueled by marketing spend – running operations with precision is a critical success factor. This is especially critical given that the global market for pharmaceuticals reached $1.2 trillion in 2018, and pharmaceutical R&D spending was $179 billion in 2018 (an average of six times more than all other manufacturing industries).
Decision-making is only as good as the information it’s based upon, and for most pharma companies, one of the most critical categories of information is time, generally the answers to questions “How are my R&D (and other) resources spending their time?” Or “On what projects – in what project phases, on what tasks, for which customers/partners – is the time being spent?”
Precise and detailed answers to these questions are required for several specific needs that – taken together – are often specifically characteristic of pharma companies like yours. These needs include:
- Project accounting – companies in many industries have a need for precise project accounting, but few industries have as critical a need as R&D for pharmaceutical companies. Every new drug is a project, and the R&D costs (among others) directly drive the product’s pricing & profitability.
- Collaborations – many pharma companies collaborate with other companies to create a specific drug, with agreements to share detailed and accurate labor effort and costs for their part of that collaboration.
- Cost center settlement – pharma companies with multiple R&D groups, and/or multiple internal “customers” of the R&D arm, must ensure that the R&D costs for each project are accounted for, and then allocated to the correct cost centers (and/or billed back to the correct internal customers) in a real-time and accurate way.
- Audits – with labor being one of the largest cost components, any internal or external audit of spending will rely heavily on how time was spent on projects, phases, and activities.
- Tax reporting – in the US, both the federal government and over 40 states offer R&D tax credits to incentivize innovation and create jobs (other countries, including Canada and Italy, also offer tax credits). Capitalizing on these credits requires accurate tracking of the expenditures of qualifying projects.
- Public-private joint initiatives/cooperatives – pharma companies frequently join forces with public and non-profit institutions on various initiatives (e.g. the Innovative Medicines Initiative in the EU). In order to allocate costs and understand the actual impacts of these commitments, the time spent across these must be tracked accurately.
The Role of R&D Time Tracking for Projects
Poor R&D project time tracking for any one of these key needs could represent billions of dollars of unrealized revenue and/or lost profitability. Specifically, The Tufts Center for the Study of Drug Development calculated more than $1.1 billion in time costs lost while a drug is in development.
Is your pharmaceutical company well-instrumented to keep more accurate track of these skyrocketing R&D costs? This is where a solution for R&D project time tracking can save you from losing potentially millions or even billions.
Such a solution will not only save your pharma company many millions in time costs but also help you to answer these questions:
- What projects are currently in development?
- What are our costs on those projects?
- Where are we losing the most money?
- Are our R&D projects staying on budget?
- Are we working on the most profitable projects?
- Do we have enough of the right people to complete our R&D projects on time?
- Do I have the information I need for any Capital/Expense and/or R&D tax credit reporting?
Journyx for R&D and Pharmaceutical Companies
It’s time to stop the hemorrhaging of R&D costs! A large, well-known pharmaceutical company uses Journyx to track their R&D costs, control costs on partner collaborations, for cost center settlement, and for tax credits – with a net value of millions.
Using Journyx for R&D project time tracking, Your pharmaceutical company will get a better handle on your development costs and realize greater profit.