What to expect from drug discovery and development in 2023

Drug discovery concept petri dish

DDW Editor Reece Armstrong takes a look at the pharmaceutical research and development market in 2023 and asks key opinion leaders what challenges and trends will emerge throughout the year.  

The Market

After over two years of the Covid-19 pandemic, 2022 year was somewhat of a return to normal for both the world at large and the pharmaceutical industry. However, that is not to say it was an easy year. The invasion of Ukraine by Russia was devastating, and its effects were felt throughout pharma as supply chains were disrupted and companies had to pause any operations they were pursuing in those countries, limiting access to medicines in both the near and long term.  

Despite this, innovation still occurred. Research into HIV blossomed throughout 2022, with ViiV Healthcare’s combination therapy for HIV-1 gaining approval in Japan; and research moving forward towards a one-time treatment for HIV as well as a vaccine. 

In terms of activity, a number of large-scale acquisitions took place, with Pfizer’s purchase of Biohaven for $11.6 billion being one of the most prominent. GSK’s acquisition of Sierra Oncology for $1.9 billion showed the pharma giant taking further steps into the oncology market and developing its speciality medicines vaccines portfolio. Indeed, GSK’s Q3 results in 2022 showed a strong performance for the company, with its operating profit coming in at 17% higher than the same time in 2021.  

However, coming off the back of high levels of return on investment (ROI) seen throughout Covid-19 and therefore 2021, was always going to be difficult for the pharma industry. As such, 2022 saw a marked fall in ROI for global pharmaceutical companies and their research and development activities. According to research from Deloitte1, the average ROI in R&D for global pharma companies fell to just 1.2% in 2022, a steep decline compared to the record 6.8% the industry experienced in 2021. 

This fall in ROI is somewhat unsurprising, considering the high levels of approvals for Covid-19 therapies and vaccines in 2021 meant that drugs that made it to market that year were not included in 2022’s analysis.  

Karen Taylor, director and head of research, Deloitte Centre for Health Solutions, commented: “While a drop-off in projected returns for biopharma R&D was inevitable after such an exceptional year in 2021, the degree is sharper than many would have expected. In 2021, projected average return on investment peaked, largely owing to Covid-19 related assets expected to be used by large global populations. Even when those assets are excluded, the average ROI for 2021 was still double the 2022 projections. 

“Aside from Covid-19, the fall in projected ROI has been driven by a combination of factors, ranging from high-value drugs securing approvals and entering commercialisation, to an increase in cycle times for drugs still in development. Furthermore, our analysis revealed that the number of terminated assets has doubled, from 15 in 2021 to 30 in 2022, including six that were forecasted to be ‘blockbuster’ assets.” 

These comments by Taylor show an industry not at its healthiest, and though figures are somewhat skewed due to Covid-19’s effect on the market, developers are still facing a range of challenges in getting their drugs to market.  

Indeed, as we look towards what 2023 will bring, the biopharmaceutical will face challenges from drug pricing, reimbursement constraints and inflation, according to GlobalData2. Growth prospects in 2023 will be under pressure due to the mix of these challenges, according to the data analytics company, whilst other global pressures including rising costs, the ongoing invasion of Ukraine by Russia, patent expirations and pressure to become more sustainable, could also hinder sector growth.  

Urte Jakimaviciute, Senior Director of Market Research at GlobalData, said: “While pricing and reimbursement constraints was scored as the most negative trend by the surveyed biopharmaceutical industry professionals between 2019–2022, inflation is predicted to bring the biggest negative impact to the sector in 2023. Inflationary pressures on labour, cost of raw materials, active ingredients, and intermediates will continue to bite into the net drug prices and the industry will need to find ways to offset this.” 

High levels of inflation is something that Vikas Munjal, Vice President, Retail, Consumer Products, and Communication at DBRS Morningstar agrees will present challenges for the industry. 

Challenges from supply chain disruptions and a stubborn inflationary environment, exemplified by higher labour and energy costs, are likely to persist in the near to medium term and could dampen operating margins and credit risk profiles, more so for small to mid-size drug manufacturers. While the underlying long-term demand drivers continue to be supported by demand from growing and aging populations and a renewed focus on health services in the wake of the Coronavirus Disease (COVID-19) pandemic, clearly, notable headwinds exist in the global pharmaceuticals sector as we head into 2023,” Munjal says.  

The modernisation of R&D models could be key to reducing spend on new drugs, a point that Deloitte makes about the need to transform the clinical trials process.  

Colin Terry, European Life Sciences R&D leader at Deloitte, explains: “Revitalising today’s clinical trials processes and operations will drastically improve trial efficiency, enhance science-based decisions, and expand collective health equity. Clinical trials of the future will be tailored to the convenience, medical, and behavioural needs of diverse patient populations impacted by the diseases under investigation. 

“Virtual trials, including at-home check-ups, remote monitoring and assessments and direct-to-patient drug distribution, are just some of the ways in which R&D leaders can decentralise the clinical trial process to cut drug development timelines. Not only will this ’digital-first’ approach place a lower-burden on patients and health care workers, but it will also have the added benefit of significantly reducing environmental impact due to reduced travel and fewer in-person interactions.” 

Unfortunately, whilst the pandemic saw an increase in the use of technology to enable things like decentralised clinical trials, from Miruna Sasu, President and CEO of data and analytics company COTA thinks there has been “a backslide post-pandemic on some of the major advancements we made in patient care and drug development.” 

“Take decentralised clinical trials (DCTs) for example. At the height of the pandemic, DCTs were seen as a viable alternative to keeping the engines running on clinical trials when non-critical in-person care was paused. It’s like we’ve taken our foot off the gas when it comes to new approaches to care that spiked during the pandemic, including DCTs and virtual care, which threatens to slow much needed progress in these areas and limits our ability to respond when faced with future public health emergencies.” 

And whilst Sasu feels that “pharma has taken its foot off the gas a bit when it comes to DCT technologies,” she is excited about the uptake of real-world data (RWD) and AI in pharma. 

  “Catalysed by the FDA’s updated RWD guidance, today we are seeing an increased focus on effectively integrating RWD into the evidence generated by clinical trials, but also in implementing clinical trial participant feedback into the design of studies to improve the patient experience. Across the board, we are seeing that leveraging traditional and non-traditional RWD is considered an important priority in order to achieve pharma business objectives,” Sasu adds.  

Whilst the pharmaceutical industry may not have benefitted as much as it could have by implementing technology post-pandemic, one area which does seem to be making inroads is that of AI. Last year saw Sanofi acquire Insilico Medicne, a clinical-stage AI company, in a deal worth $21.5 million, to advance drug development for up to six candidates.  

This year too has started with strong activity from BioNTech in a deal worth potentially over £500 million for the purchase of the AI/ML company InstaDeep. The deal is a move by BioNTech to expand its capabilities in AI-driven drug discovery and the development of immunotherapies and vaccines.  

Ashu Singhal, Co-Founder and President at Benchling sees this type of activity as indication of the biotech industry heading towards a new way of working. 

While the scientific community has previously championed lone discovery or collaboration around a single molecule, AI is shaking this up and creating a more collaborative biotech sector. Now, labs are increasingly partnering to work on massive data sets, helping to accelerate the path to discovery and breakthrough,” Singhal says.  

“AI in biotech will also be a driving force behind the hiring of new talent in the field of data science and AI and ML, helping to improve data standardisation and create a stronger digital data backbone across the industry. These changes will not only benefit the application of AI and ML in biotech, but improve scalability and efficiency in R&D overall.” 


According to GlobalData genomics will play a significant role throughout 2023 in terms of how the industry understands, prevents and treats diseases. According the analytics company, advancements in sequencing and data analysing technologies can help improve diagnosis times and enable precision medicine approaches. 

This is a prediction which Adrian Sutherland, Senior Architect at software development company Endava, agrees with. Sutherland believes that “genomic analysis and quantum simulations will help fuel breakthroughs.” 

“The data size, low cost to capture and clinical potential of genomic data means that the systems that can analyse these data sets efficiently will become more and more important. Opportunities will progress for use cases such as cancer diagnoses based on liquid biopsies, predicting cancer progression and improving gene editing tools potential (e.g. CRISPR). As this technology takes hold, we’ll see different data united such as genomic and facial features to create AI models that can predict generic disorders from facial features alone. 

Quantum simulations also present numerous medical applications, from fast drug design (e.g. molecule/compound screening), real-time (or even faster) medical simulations (imagine “in silico” clinical trials with virtual humans) and super-fast whole genome sequencing and analytics. While 2023 is unlikely to be the breakthrough moment, ongoing research and applications in clinical simulations will push quantum simulations’ potential forwards in the real world,” Sutherland said.  

Advanced Therapies  

For Kerstin Pohl, Senior Global Marketing Manager, Gene Therapy & Nucleic Acid at SCIEX, the urgent need to need to get to market has been catalysed by the pandemic. More so, the move from small molecules to biopharmaceutical which the industry underwent decades ago, is seeing similar comparisons with companies now targeting cell and gene therapies. 

“What we are experiencing right now, in fact we are in the middle of it, is the next evolution. We are seeing the change from traditional biopharmaceuticals to cell and gene therapies. They will allow us to treat a disease with one single dose. And at times, not just treat a disease, but cure it, because we can target a defect gene. Leading biopharmaceuticals globally are establishing entire departments and technologies around cell and gene therapies. The focus around these new modalities are significant,” Pohl says.  


With the current explosion of research into cell and gene therapies, manufacturing will be key in order for advanced therapies to actually make it to the bedside.  

One of the major barriers referred to in CRB’s Horizon Life Sciences 2022 report3 is the limited current good manufacturing practice (CGMP) manufacturing space. The report highlights that this is a chronic problem across the life sciences industry and that gene therapy innovators may be particular hard hit “given that most are in early research phases and likely don’t have their own manufacturing facility. Many lean on CMOs for outsourced capacity planning, who are heavily bottlenecked as a result,” the reports reads.  

The report also points to the intrinsic link between clinical trials and manufacturing, and whilst clinical trials didn’t rank the highest of concerns for the almost 500 industry leaders surveyed, CMOs are still concerned about the pharma industry generating strong trial results for cell and gene therapies.  

With manufacturers depending on drug developers to generate strong results, and as such, get their therapies to market, it makes sense that this would be a concern for CMOs whose business depends upon such cyclical industry practices.  

“To edge toward commercial approval, owners need clinical trial results that will persuade regulators of their product’s safety and unique therapeutic efficacy; if the market already offers a comparable product, approval is unlikely,” the report states.  

But what are manufacturers doing to prepare for the influx of cell and gene therapies? According to the Horizon Life Sciences 2022 report, the need to scale-up operations to meet demand is something manufacturers are already thinking about. For instance, 40% of those surveyed are increasing process scale per batch, whilst 37% are planning to incorporate plasmid manufacturing in-house. These preparations will be key if more cell and gene therapies make it to market in the coming years.   

Outside of cell and gene therapies, shortcoming in biomanufacturing mean that “many patients are missing out on access to everything from common treatments for the flu to more complex cures for diseases like cancer,” according to Singhal 

Singhal references how limitations in biomanufacturing are increasing the way for patients with multiple myeloma to receive treatment with CAR-T therapy. This is a critical point in the disease stage where the treatment can no longer be effective, Singhal says.   

“The current limitations in biomanufacturing play a role in this challenge. Currently, there aren’t enough CAR-T manufacturing facilities, and the process of manufacturing these bespoke treatments, which rely on patients’ unique cells, is timely and cumbersome due to often being carried out manually. Data at manufacturing sites is captured entirely by pen and paper, both increasing the potential for error and slowing the process down.  

If biomanufacturing facilities had the tools to input data digitally and easily share information across all the stakeholders in the manufacturing process, like the hospital, shippers, and drugmakers, CAR-T cells could be made an estimated 40% faster4.” 


1: https://www2.deloitte.com/uk/en/pages/press-releases/articles/pharma-r-d-return-on-investment-falls-in-post-pandemic-market.html  

2: https://www.globaldata.com/store/report/state-of-biopharmaceutical-industry-analysis/  

3: https://go.crbgroup.com/2022-horizons-life-sciences-report  

4: https://www.statnews.com/2022/06/02/car-t-crisis-cancer-patients-die-waiting/  

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