Pharma to Make the Private Public

Last week, leaders from companies like AstraZeneca, GlaxoSmithKline, Pfizer and Roche met in Vienna in a closed meeting to discuss the future of the pharma industry. Fears of layoffs at pharmaceutical companies are once again dominating the news, but could there be a less painful way to save money?

Attendees at the Next Generation Pharmaceutical Drug Discovery Summit (hosted by GDS International) were among those leading the rumours of job cuts within the Drug Discovery Arena, but this was far from being their main focus. Despite the obvious fears and dangers, the consensus was that the only way forward was to continue looking towards the future.

Ted Torphy, Vice President & Lead, External Innovation of Johnson & Johnson made it clear that as a pharmaceutical company they were there to lend a little more rope to solution providers and to have faith in their abilities. He discussed the idea of setting up ‘temporary partnerships’ to combat an innovation deficit recently noticed within pharma. Productivity within the labs has been seen to be plummeting as the focus begins to switch from diseases that are relatively common to those that are more complex or unusual.

“The innovation deficit has enormous implications for the industry as a whole. Many pharmaceutical companies need to look at what they want to be doing and where they should be concentrating. They must identify the core competencies the activity will require. The pharmaceutical companies that regard R&D as a core element of their business will have to make fundamental alterations in the way they work.”

One suggestion made is that the industry should become more innovative and look to reducing its R&D costs. Private companies who conventionally undertake pharmaceutical research will traditionally employ stringent measures to protect their research results as private intellectual property (IP) until they have achieved a marketable compound. A by-product of this is an inability to share their research results with each other, sometimes even within a single company. Pharmaceutical researchers tend to be consumers rather than suppliers. Consequently, commercial competitors are blocked from access to important discoveries as well as an effective research history. So the consensus at the NGP EU summit was of a need to fill the ‘IP Shadow’ and the recently experienced innovation deficit.

Ted Torphy was joined in his views by Les Hughes, VP Drug Discovery for Oncology & Infection, AstraZeneca and Andrew Parsons, VP and Head of Preclinical Development , GlaxoSmithKline Centre of Excellence for External Drug Discovery (ceedd) in calling for a open collaboration that embraces temporary partnerships and sharing intelligent property.

Companies themselves are expected to change shape. In the future the industry will look vastly different from the current model of huge companies carrying out a range of functions – research, development, marketing, sales, and manufacturing – across the globe. While big companies will still exist, they will need to pursue different business models and try new methods to achieve the right balance.