Various studies and analysis have shown that the productivity of the pharmaceutical and biotech R&D functions has been declining. One author goes to the extent that the law of diminishing returns is so apparent that by 2020 the internal rate of return of R&D investments will reach 0% and that pharmaceutical R&D is in terminal decline in its current form. We shall approach the topic starting out from a problem statement, followed by some useful definitions of the different parts of R & D then move on to the question of measurement practices and metrics. We introduce a systemic approach to developing productivity metrics and propose a set of different dimensions to consider for arriving at the right fit for an organisation's needs, together with an optimisation model that can be applied to the selected dimensions. Finally, we propose a few specific areas where tangible improvements can be achieved.