Open innovation in drug development
Juilee Dandekar, Sector Expert - Healthcare, Business Research & Advisory, Aranca shares insights on how greater transparency in drug development could deliver quicker, more affordable solutions
Traditional drug development is a costly, tedious process for pharma companies the world over. There is immense investment of time, effort, and money involved in developing a new drug. The time taken to move a new formulation from discovery to commercialisation is 10–12 years. So, while the government prioritises affordable healthcare, the pharma industry is battling pricing pressure from patients, healthcare providers, as well as regulators.
The complexities involved in commercialising any new drug has led pharma companies to adopt a more open, collaborative approach for their research and development (R&D) processes. The need for multiple competencies, skills and technologies, and multi-disciplinary tasks has prompted this move. To this end, companies have established collaborations and joint ventures with academic institutions, built innovation centres within the organisation, and experimented with crowdsourcing and virtual R&D. In times of dire need, such as in the current pandemic, competitors also collaborate and/or partner with each other. Companies, at this time, are focusing more on strengthening external knowledge, acquiring the right drug candidates, licensing, and moving R&D models from inside-driven concepts and ideas to a more open, innovation-led paradigm.
There are several advantages to introducing open innovation for the drug creation process, some of which are explored here:
- Through strategic partnerships, a company can access the expertise of talented individuals from within India and those based abroad. This can help expand the knowledge base and create a conducive environment for innovations
- Project delivery is ramped up as shared knowledge helps speed up the research process
- The company can maximise returns on its R&D investment
This model would also benefit end consumers and caregivers. Open-innovation collaborations such as crowdsourcing, PPP, and corporate partnerships would help pharmaceuticals reduce their overheads. Pharma products then pass on this benefit to end customers, thus bringing to market inexpensive medicines. Hence, medical care becomes more affordable for a larger section of society.
Faster drug development would also mean more options and better treatments available for customers. Open innovations and collaborations have managed to improve efficacy and develop drugs that target diseases precisely, with minimal side effects. This has led to an exact understanding of various diseases and their causes.
To successfully implement open innovation, an organisation needs to do the following:
- Bring about a significant cultural change from the top down: Whole organisation must embrace external innovation and talent, and avoid the ‘not invented here’ syndrome
- Introduce reward and recognition for value-adding behaviour
- Align open innovation to organisational strategy and track the value created
Several companies worldwide have successfully applied this model, among them Eli Lily, AstraZeneca, and Bayer HealthCare. Through open innovation, these companies have managed to reduce complexity and increase efficiency. They selected the appropriate external knowledge that could help them achieve economies of scale and scope and deliver the highest quality output.
The Indian government also adopted the aspects mentioned earlier and introduced open-source drug discovery (OSDD) in 2008. The hybrid model of PPP and open-source synchronised pharma companies, medical organisations, and scientists from varying industries (such as Sun Microsystems, the Institute of Genomics, TCG Lifesciences, and the Integrative Biology or Sky Quest Labs) have helped to establish high-quality research on neglected diseases at low cost. This has fostered innovative discoveries and cures. OSDD also provides data and supports the progress of drug discovery projects.
The pharma industry must adopt an ‘open’ business model as it allows knowledge-sharing, which is essential for quicker, more efficient drug development. Diseases such as cancer, dementia, Alzheimer’s, and Parkinson’s still lack a cure. Due to the complex nature of the disease, companies are yet struggling to understand the causes and ways to deal with them. Open collaboration can help with a plethora of such issues as it would allow data sharing among experts, all of whom possess great knowledge of the subject. Companies can identify the right knowledge they require and incorporate it in their new drugs. However, to leverage the full potential of open innovations, the industry must encourage a true collaborative culture in organisations. Only then can they successfully adopt, adapt and evolve.