miércoles, 22 de mayo de 2013

A helping hand with innovation / Open Innovation hurdle

As healthcare innovation evolves, pharma is beginning to look beyond its own four walls to embrace collaboration 

 Recently Sir Andrew Witty, CEO of GlaxoSmithKline (GSK), stated that: “It would be naïve or arrogant of us as an organisation to think that we had all the answers internally”. This is hugely relevant in the current patent cliff-dominated industry environment but how can the industry best harness outside ideas and accelerate innovation? 

Slide: F.Comas/Curso Postgrado Mktg.Farmacéutico/ Facultad Farmacia Universidad Central de Venezuela (UCV)

 We are all aware that the traditional pharmaceutical business model needs to change. The model was built on major, prolonged investment in developing products that turned into huge blockbusters, from which companies could maximise returns until the patent expired and could leverage as cash cows to fuel further research. However, this era is now coming to an end: most of the blockbuster breakthroughs have been discovered and those which are already out there, such as Pfizer's Lipitor and Sanofi's Plavix, are now coming off patent. 

 Surely, one may ask, the business model now just needs a little reworking to search for 'mini-blockbusters' and it just requires a little more time and money, doesn't it? Well, not exactly. 

 It currently costs around $1m per day to get a drug to market. This cost is so staggering because for every molecule that gets to market, 9,999 other molecules do not. In addition, of the small percentage that reach the market, only around a quarter actually become profitable and remember these successes have to fund research for all the rest. To exacerbate the return on investment equation further, due to patent expirations, and the length of time between patent and launch, those launched drugs only have a limited length of time (typically five to 10 years) to recoup their investment before generics can be sold for a fraction of the cost. 

Since all low hanging 'blockbuster' fruit has now been gobbled up, so the 1/10,000 ratio is now likely to be much higher and subsequent returns lower. This is why many of the world's largest pharmaceutical companies have either outsourced or completely withdrawn their R&D efforts for the most difficult disease areas such as CNS and infectious diseases where those ratios look even bleaker. (Más)

Open Innovation hurdle

The next stage along this continuum is the 'consortia' approach, which involves multiple parties. In healthcare this has mainly been used when the profit motive has been removed; it is collaboration for the greater good.

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