Can pharmas learn to love open innovation?

by Anne Zieger on September 1, 2010

Pharmaceuticals

Pharma pipelines are running dry...

Right now, pharmaceutical companies are loath to share information with anyone, much less collaborate closely on new inventions. But what if pharmas eased up and began to share ideas freely with research partners? (Not subsidiaries. Not grantees. *Partners* with skin in the game.)

While it might be painful, opening up the R&D process could solve some serious problems for the industry, notably a big slowdown in the number of drugs making it to market.  That, at least, is the conclusion drawn by blogger Kristen Koch of crowdsourced solutions firm hypios.

Koch argues that pharmaceutical companies must move from locked-down R&D methods to “open innovation”:

“Open innovation depends on the existence of multiple sources of expertise and indeed, the rise of biotech companies, increased specialization of research organizations, and even the growth of the Internet have encouraged the spread of expertise.The challenge for pharma is not creating expertise or training researchers, but locating experts who can help and taking advantage of their knowledge, which requires pharma to share its IP.”

Not only can open innovation product more viable drugs, faster, it can cut the gigantic R&D costs pharmas face.  While sharing R&D costs means sharing profits, it also means pharmas lower their risks.

Lower risks, in turn, can help pharmas get more products through the pipeline, she notes. “The less that is riding on a project, the easier it becomes to kill that project if it doesn’t work out…[But]when hundreds of millions of dollars have gone into a drug, careers are on the line.”

It’s been a long haul, pharmas are actually taking steps in this direction, Koch concludes. In fact, 41 percent of drug development was outsourced in 2009, thanks in part to the growth of the contract research organization business.  And there’s interesting projects like The Pfizer Incubator, a sort of VC-fund approach, which offers resources to scientists and entrepreneurs.

Still, it seems pharma has a long way to go before it gets the most out of the brains available within academia and emerging biotech organizations.  As the pipeline gets emptier still, let’s see just how far pharmas stretch out of their comfort zone.

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