Bio-Innovation: Reinventing the R&D Business Model

By Chelsea Macary 
July 1, 2013 | In an industry that spends billions of dollars each year on development, it’s surprising to hear conversations about the lack of innovation. Yet it is a troubling refrain in the pharmaceutical R&D landscape, claimed experts at Drug Information Association panel last week* led by Kenneth Getz, director of sponsored research at Tufts Center for the Study of Drug Development. 
The President’s Council of Advisors on Science and Technology (PCAST) issued a report on innovation in drug discovery, development, and evaluation last September that challenged the industry to reinvent the R&D business model in favor of innovation.    
This may be easier said than done, but pharmaceutical and biotech organizations, contract research organizations, and academic research centers are adjusting their business models to foster innovation, starting with more competitor openness. Partnerships, alliances and collaborations in the drug R&D space, and government support within the pharma sector, have been on the rise panelists said. 
According to Bernard Munos, Founder of InnoThink, “It should be practical to practice open innovation in big pharma companies.” Collaboration is essential for further innovation. “Companies can compare and share [data in] alliances,” Munos said. “The more we share, the more we understand the science, leading to optimal results and advanced health care.” More open innovation will help big pharma tackle the big  problems, Munos said, like personalized medicine. 
But Tomasz Sablinski, Founder and CEO of Transparency Life Sciences, noted that partnerships bring fairly controversial issues to the table. How much information should be shared between companies? Although more sharing could speed drug development and be beneficial to the patient, it is not as financially beneficial to the companies. In contrast, closed innovation gives the companies more control over their marketing and finances, but slows a drug’s time to patient.  
Dalvir Gill, CEO of TransCelerate Biopharma, raised the much-lamented pipeline issue. $1.3 billion can easily be spent to develop one drug. According to Gill, this track is “not [a] sustainable model—we don’t have the money!” and implies that the R&D space clearly needs to be reorganized to channel money toward projects that will yield marketable drugs. 
The “how”, though, remains unclear. Sablinski noted that large corporations are hesitant to ask for outside financial support, assuming it will not be approved. He said he often hears comments like, “We can’t innovate because the FDA won’t allow it,” and refers to these assumptions as “innovation laziness.”  
The industry is at a turning point, the panelists agreed. It’s time for a change to advance research and improve health care. Implementing the proper strategies and changes in the business model can expand both treatment options and research opportunities.


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