Business
What are the obstacles to innovation in the pharmaceutical industry?
Innovation is a key word throughout the pharmaceutical industry and the healthcare community1 and its pursuit is a business imperative for Pharma.
P
harma urgently needs to produce innovative new therapies if it is to overcome its critical, long-term challenge, ie the revenue gap pro- duced by the industry’s failure to develop suffi- cient, new, patent-protected medical therapies to offset the revenues lost as existing products lose their patent protection (Figure 1)2.
Contributing to this challenge is a relentless downward pricing pressure. “Indeed,” reports Steven M Paul et al3, “for every dollar lost in declin- ing product revenues due to patent expirations by 2012, it has been estimated that large-cap pharma- ceutical companies will only be able to replace on average 26 cents with new product revenues.” The pharmaceutical industry’s responses to this pressure are multi-faceted. Some companies have increased expenditure on R&D (see Figure 2), oth- ers have engaged in enhanced merger and acquisi- tion, many have reinforced their product in-licens- ing capabilities, all seem to be reorganising and only a few have not instituted considerable staff cutbacks. In 2009 the industry lost >60,000 jobs and in 2010 >50,0004. To produce the next gener- ation of innovative medical therapies, pharma urgently needs better, faster and cheaper drug dis- covery and development processes. However, none of these business adjustments has resulted in sig- nificant progress to date.
What is keeping pharma from innovating? Cynics might argue that the barriers lie in the processes of R&D itself and the relationships between scientists and their supporting corporate functions such as information technology, intellectual property, legal, procurement and quality assurance. However, what-
Drug Discovery World Summer 2011
ever the counter-innovative influences of these func- tions might or might not be, the fundamental obsta- cles to innovation more accurately reside in the industry’s inability to enable intra- and inter-compa- ny organisations to exchange information securely and in an unequivocal and understandable way. Innovation is blocked by the industry’s reluctance to let go of unnecessarily individualistic business processes utilising ill-defined, non-existent or poorly accepted data and information standards.
Pre-competitive collaboration Precompetitive collaboration enables all pharma- ceutical industry stakeholders – lifescience organ- isations, technology vendors, publishers and aca- demics – to work together in order to codify best practices, signpost ways of working and develop standards that can spur innovation. This paper provides some insights, gleaned from the Pistoia Alliance community, into what is impeding inno- vation in pharma and provides examples of how precompetitive collaboration can identify com- mon use cases and from them, derive appropriate and useful information standards that improve the interoperability of R&D business processes.
Identifying barriers to innovation Many commentators have identified barriers to innovation in pharma, including Warren Kaplan, who compiled the following list in 20045:
l Inadequate understanding of basic science for certain diseases and the identification of targets amenable to manipulation.
17 The Pistoia Alliance
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