For more than 50 years, pharmaceutical research and development has remained a sequential and insular process. Inefficient, risky and increasingly expensive, the paradigm for drug development is in desperate need of change. Open innovation partnerships represent a new research and development model that holds great promise in transforming the drug development process by integrating capabilities and expertise among a diverse collective of internal and external stakeholders.
The old drug development paradigm is no longer sustainable
Open innovation could not come at a more critical time for research-based industry. There are numerous signs that traditional pharmaceutical research and development is failing; drug development output – as measured by the rate of new drug approvals – is anemic, while the cost to develop new drugs has been growing at an alarming 9% annually Citation[1]. Moreover, drug development remains a highly risky endeavor, with only approximately 16% of candidates that enter clinical testing making it to regulatory approval Citation[2]. High attrition rates and long cycle times – on average 7.5 years from first-in-man studies through to regulatory submission followed by another 1.5 years of regulatory review and approval – in pharmaceutical research and development have been relatively constant over many decades Citation[3,4].
The total long-term investment required to develop a single successful drug now exceeds US$1.3 billion. Each marketed drug must cover its own direct costs (30% of the total) plus all of the costs associated with failed drugs (70%) Citation[5]. Soft global consumer demand, intense price pressure, generic competition and more than a hundred billion dollars in revenue at risk owing to patent expirations over the next 3 years characterizes the stifling commercial conditions under which drug developers need to recoup their massive research and development investments Citation[6].
Whereas drug development sponsors over the years have implemented a variety of strategies to improve research and development efficiency and boost output, these strategies have not been transformative. In fact, they have had marginal impact, due in large part to poor execution and the targeting of outdated opportunities. In some respects, these strategies have made conditions worse. Studies conducted by the Tufts Center for the Study of Drug Development (CSDD) consistently support this conclusion. For example, in an attempt to increase research and development output and diversify product portfolios, many companies over the past decade have pursued mergers and acquisitions and in-licensing transactions. Tufts CSDD research finds that these transactions have had the unintended consequence of increasing drug development risk and workload, reducing pipeline size and diverting capital to support the integration of operations and subsequent infrastructure consolidation Citation[7].
For many companies, a primary strategy to improve success rates has been to increase the amount of clinical data collected and, in some cases, to adopt more flexible protocol designs. However, Tufts CSDD has shown that this strategy tends to increase the scientific and operating complexity of research and development programs and, as a result, has contributed to the relentless rise in drug development costs. Protocol design complexity, as measured by the number of procedures performed, volunteer eligibility requirements, case report form pages and required volunteer visits, have all increased dramatically during the past decade Citation[8].
Tufts CSDD has also found that more complex protocols result in substantially longer cycle times and are associated with a notable reduction in volunteer enrollment and retention rates when compared with less complex protocols. In addition, more complex protocols tend to have a greater number of amendments and a higher rate of observed adverse and serious adverse events Citation[9].
Other strategies, including the globalization of clinical trials and consolidation, have been implemented to lower direct costs, but they too have had the unintended effect of driving up operating costs and increasing cycle times. The growing placement of clinical trials in particular in emerging markets, where infrastructure, oversight and clinical research expertise are often limited, has introduced new operating complexities and costs Citation[10].
Similarly, downsizing combined with an increase in the use of contract service providers has been a strategy pursued by many companies to lower fixed costs while managing a rising level of research and development activity. For many sponsor companies, however, downsizing has resulted in a highly fragmented, unsystematic and inefficient use of contract service providers Citation[11].
Open innovation partnerships: redefining the research & development paradigm
Pharmaceutical research and development has been quietly evolving as the accessibility of globally dispersed and highly experienced professionals has increased, and receptivity across the industry to establishing and integrating more open and flexible relationships has grown.
At the heart of open innovation are the sourcing and leveraging of expertise wherever it can be found, and the sharing of knowledge, intellectual property and information as freely as possible. Open innovation relies on a flexible, coordinated and integrated community of internal and external stakeholders, each contributing unique competencies and energies. These partnerships also rely on leading-edge technologies to create collaborative working environments and to share data, governance and operating procedures and risk Citation[12].
Open innovation partnerships, by leveraging expertise and knowledge from different sources, hold promise in shortening discovery and development cycle times, reducing research and development costs and improving success rates in a number of ways. For example, collaborative barriers between public and private organizations and between companies and individuals separated geographically are far lower. Each party performs more efficiently, as it brings a high degree of expertise and subject matter experience. In addition, parties involved in a given partnership may inject elevated levels of passion and commitment into the relationship, resulting in a greater willingness of individuals to go the extra mile to support the activity. Partnerships also spread and share risk among all stakeholders, thereby facilitating higher levels of accountability.
For many companies, partnerships with academic research centers have become an important mechanism for gaining access to cutting-edge science and new technologies, while allowing the company to lower overhead and investment in expensive discovery tools and technologies Citation[13]. Pfizer’s newly created regional Centers for Therapeutic Innovation and Eli Lilly’s Innovation Fellowship Awards Program, for example, represent those companies’ commitment to academic–industry partnerships, the goal of which being to bridge the gap between basic research discoveries and the commercial development of new medicines.
Single and multifunctional service provider relationships and integrated alliances are other examples of open innovation partnerships. Widely adopted by mid-sized and large drug companies and contract research organizations (CROs), functional service and integrated alliance partnerships are premised on sponsors’ willingness to outsource functions deemed to be noncore (e.g., study monitoring, site management, patient recruitment and data management). In these arrangements, governance, operating procedures and systems are shared and integrated, and the CRO assumes the operating risk for the function or program being outsourced Citation[14].
Numerous multicompany and public–private consortia have formed over the past decade. Examples include Enlight Biosciences, the Alzheimer’s Disease Neuro-imaging Initiative, the Coalition Against Major Diseases and Sage BioNetwork. These collaborative partnership-based communities reflect growing interest among companies to provide funding, exchange knowledge and share precompetitive data to identify new drug candidates and tap into stratified patient populations Citation[15].
Virtual drug development companies, such as Eli Lilly’s Chorus and Transparency Life Sciences, are also becoming more prevalent. These organizations are comprised of autonomous communities of scientists and service providers, managed by a central source of capital and leadership, and engaged in open and coordinated collaboration.
A growing number of patient groups have formed alliances – some as early as 1986 – to bring together diverse communities of scientists, practitioners, patients and their families. Examples include the Cystic Fibrosis Foundation, the Breast Cancer Alliance, the Lupus Foundation and the Michael J Fox Foundation. Historically, these allied patient groups offered small grants for research focused primarily on rare and orphan indications with relatively small markets and negligible resource commitment from industry. Today, however, patient groups may provide substantial funding for targeted research, help set research agendas, identify and engage research professionals, recruit patients from among their membership for clinical trials and establish collaborative relationships with industry.
Eventually, integrated partnerships will span the entire research and development continuum – from drug discovery through development and commercialization of new medical therapeutics. Large pharmaceutical companies will provide resources, regulatory experience and infrastructure (e.g., scale manufacturing, marketing and sales); academic research centers will supply basic and translational research capabilities and access to cutting-edge science; small pharmaceutical and biotechnology companies will provide innovative discovery and early development capabilities; CROs and investigative sites will deliver clinical research operating and execution capabilities, and patient groups will help set the research agenda, provide access to study volunteers, and in some cases contribute research funding Citation[16]. Open and integrated partnerships represent a unique and compelling opportunity to substantially change the drug development paradigm and to deliver better treatments more efficiently to patients.
Financial & competing interests disclosure
The Tufts Center for the Study of Drug Development is a nonprofit, academic research center at Tufts University School of Medicine (MA, USA). Tufts Center for the Study of Drug Development is funded in part by unrestricted grants from pharmaceutical and biotechnology firms, as well as companies that provide related services (e.g., contract research, consulting and technology firms) to the research-based industry. The authors have no other relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript apart from those disclosed.
No writing assistance was utilized in the production of this manuscript.
References
- Pammolli F, Magazzini L, Riccaboni M. The productivity crisis in pharmaceutical R&D. Nat. Rev. Drug Discov. 10(6), 428–438 (2011).
- DiMasi JA, Feldman L, Seckler A, Wilson A. Trends in risks associated with new drug development: success rates for investigational drugs. Clin. Pharmacol. Ther. 87(3), 272–277 (2010).
- Kaitin KI, DiMasi JA. Pharmaceutical innovation in the 21st century: new drug approvals in the first decade, 2000–2009. Clin. Pharmacol. Ther. 89(2), 183–188 (2011).
- Munos B. Lessons from 60 years of pharmaceutical innovation. Nat. Rev. Drug Discov. 8(12), 959–968 (2009).
- DiMasi JA, Grabowski HG. The cost of biopharmaceutical R&D: is biotech different? Manage. Decis. Econ. 28(4–5), 469–479 (2007).
- World Preview 2016 Report. Evaluate Pharma, DE, USA (2010).
- Getz KA, Zuckerman R, DiMasi JA, Kaitin KI. Drug development portfolio and spending practices after mergers and acquisitions. Drug Info. J. 43(4), 493–500 (2009).
- Getz KA, Campo RA, Kaitin KI. Variability in protocol design complexity by phase and therapeutic area. Drug Info. J. 45(4), 413–420 (2011).
- Getz K, Zuckerman R, Cropp A, Hindle A, Krauss R, Kaitin K. Measuring the incidence, causes, and repercussions of protocol amendments. Drug Info. J. 45(4), 265–275 (2011).
- Kaitin K (Ed.). Rising demand is expanding scope and workload of regulatory affairs function. Tufts CSDD Impact Reports 12(2), (2010).
- Getz KA, Vogel JR. Successful outsourcing: tracking global CRO usage. Appl. Clin. Trials Online 17, 39–44 (2009).
- Hunter J. Is open innovation the way forward for big pharma? Nat. Rev. Drug Discov. 2(9), 87–88 (2010).
- Kaitin KI. 21st century bioinnovation: academic–industry partnerships are increasingly important in biopharmaceutical innovation. Pharma. Technol. 35(6), 32 (2011).
- Getz K. FIPNet: pharma’s new, sexy, but not yet ready for print-time model. Appl. Clin. Trials (Suppl.), 10–16 (2009).
- Kaitin KI. Creating innovation nodes to meet unmet medical needs: pharma companies must balance demand for new drugs while facing reduced R&D spending. Pharma. Technol. 35(12), 27 (2011).
- Kaitin KI. Deconstructing the drug development process: the new face of innovation. Clin. Pharmacol. Ther. 87(3), 356–361 (2010).