Healthcare places immense expectations on the pharmaceutical industry, with R&D at its core. Globally, pharma companies invest 15–19% of revenues in R&D, yet outcomes remain uncertain: only one drug emerges from 5,000–10,000 compounds, often costing $250–500 million, and just 3 in 10 drugs recover their R&D investment. Despite rising R&D spend, new molecule approvals have slowed and regulatory scrutiny has intensified.

In India, R&D investment is significantly lower at 2–4% of revenues, historically driven by a focus on process R&D and reverse engineering. With the shift to product patent regimes, Indian pharma faces a strategic inflection point. Key challenges span high financial risk, technology choices, talent shortages, project selection, and commercialization pathways.

However, India’s lower R&D costs and growing clinical research capabilities create opportunity. A well-defined R&D strategy aligned with business goals focused on priority therapy areas, partnerships, efficient capital use, capability building and faster commercialization can improve returns. Using structured frameworks such as the Balanced Scorecard can help translate R&D investment into sustainable business value.