What are the optimal conditions for innovation to prosper? The pharmaceutical industry's future is so dependent on the generation of innovation and IP that we need to answer this question.
Not-for-profit organisations, such as universities and institutes (private and public), provide access to science at the cutting edge of the underlying mechanism of disease. Their productivity is dependent on their funding, which is important not just for supporting research but also for attracting the right scientific leaders. Such individuals are key to the success of these not-for-profit organisations.
We should also not forget that recent blockbuster drugs of the now larger pharmas came from the R&D of their smaller predecessors. Did size contribute to the success of the original companies and are smaller entities better environments for invention and discovery? The answer is probably yes. I believe that individual scientific leaders are crucial to successful innovation. These people are usually single-mindedly driven to discover medicines, and thrive in relatively non-bureaucratic environments where they can influence and drive research. After the formation of GlaxoSmithKline (GSK), Tachii Yamada (Chairman of Research and Development) recognised the need for smaller units and so created the GSK Centres of Excellence for Drug Discovery (CEDDs). The purpose of these CEDDs was to create an environment where innovation and agility in development could take place, and what will be crucial to their success is their ability to select scientific leaders to lead their discovery programmes.
"Maybe large pharmas should reduce their discovery research and focus on late-stage clinical development-leaving innovation to the smaller and more productive entities?"
So as large pharmaceutical companies merge and grow in size can they create the environment for innovation on a scale at which most of their drugs come from their own R&D? The emergence of venture capital-backed biotechs in the past 30 years has created a new environment for discovering and developing drugs. In light of the many recent deals between biotechs and larger pharmas, we need to ask whether the apparent reliance on biotechs for obtaining new drugs reflects the inability of the larger companies to discover as they grow? Innovation in successful smaller companies is often dependent on one or two key scientific leaders focused on producing commercially viable and innovative drugs or technologies, and it is the very independence of these smaller companies that has given larger pharmas a greater opportunity to in-license drugs when the risk was reduced, and the drugs already in clinical development.
Maybe large pharmaceutical companies should reduce their own discovery research and just focus on late-stage clinical development-leaving innovation to the smaller and more productive entities?
Fintan Walton
Chief Executive Officer
PharmaVentures Ltd