The costs of innovation have rose to the extent that discovery gaps exist for whole industries. The pharmaceutical industry has been the focus of many studies as to why such a discovery gap (drugs with expiring patents coupled with few new molecular entities) has existed since the mid-1990s. Clearly, large expenditures in genomic research have not yielded timely results and products as was originally expected.
Resource allocation in time and money have been enormous since the mid-1990s. A recent study by Ringel et al. (2013) shows that early cessation of pharmaceutical candidates facilitates R&D productivity, not company size or expenditures. Early termination of candidates, or a strong triage, at the preclinical stage increases the success of the whole development program by redirecting resources to the next candidate. Accurate, verifiable triage at the preclinical stage ensures that relatively minimal money is spent before expensive clinical trials are conducted.
Ringel et al. (2013) also found that locating pharmaceutical R&D efforts near a science hub increase success by providing better access to local talent and better chance for collaboration.
Ringel, M. et al. Does size matter in R&D productivity? If not, what does? Nature Review Drug Discovery 12:901-902. doi:10.1038/nrd4164.