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Furthering Your R&D Budget While Simultaneously Boosting Innovation


Pharmaceutical Executive

While pricing issues need to be addressed in a transparent manner, what cannot be disputed is that the vast majority of the industry is committed to the discovery of vital new medicines with the power to change patients’ lives, writes Dr Steve Arlington.

Rarely does a week seem to pass without the pharmaceutical and biotechnology industry coming under considerable fire for the perceived high pricing of drugs. Whether it’s President Trump stating that, “drug prices are out of control,” the introduction of new legislation in the UK to regulate prices, or the creation of a new panel in India to explore price caps for more drugs. The pressure can seem relentless. Despite this continued media focus on drug prices, they only total around 15% of the total healthcare bill-a statistic often ignored when total healthcare costs are analyzed.  

At the same time as questions over pricing abound, the industry also bears the brunt of broader criticisms. These include the absence of new antimicrobials, to a perceived failure to ‘cure’ viruses such as Ebola and Zika, as well as other endemic infectious diseases like Malaria that typically affect developing nations. Societies and observers, particularly in the developed world, often misconstrue and underplay the crucial role pharma plays in solving such challenges, along with the life-saving breakthroughs it has made in the past.

While pricing issues need to be addressed in a transparent manner, what cannot be disputed is that the vast majority of the industry is committed to the discovery of vital new medicines with the power to change patients’ lives. The industry is, ultimately, just one cog in an interconnected wheel of governmental, legislative, and societal players and agendas. Furthermore, as the nature of research changes and complexity deepens, a more collegial and collaborative approach will be required to achieve the necessary future innovations.


Budgets are on the up, but so are expectations

Despite the negative press the pharmaceutical industry receives, the reality is that companies are still investing heavily in the development of new innovations and therapies. Though productivity has not always matched expectations, the industry has actually increased the amount it spends on R&D over the last decade. The process of drug discovery is long and arduous. It may be difficult for those outside the industry to fully appreciate that it takes between 12 to 15 years to develop a new drug at an ever-increasing cost of development-which has soared to $2.7bn, as recent data from the Tufts Center for the Study of Drug Development has shown.

Adding further pressure is the general public’s inflated expectations around the potential of precision medicine and personal genomics. The explosion in genomic data, and the emergence of companies offering rapid and affordable personal sequencing, is muddying the water. The growing accessibility of genomic sequencing is leading many consumers to believe that a ‘drug for me’ is just around the corner-despite the enormous complexity that delivering precision medicine to large patient populations will involve. Not least because incorporating huge genomic data sets into R&D requires very different technical skills that pharma and biotech firms may not have in abundance.

To meet the rising expectations of the public, and the demands of governments, regulators, and shareholders, companies must explore ways to amplify their R&D budgets so investments go further. One way to do this is through greater cross-company and cross-discipline collaboration. This is no small task, because it will require a considerable cultural shift in the industry.


Collaboration is essential to future innovation

The old idiom, a problem shared is a problem halved, is increasingly true, and indeed necessary, when it comes to the discovery of new drugs and devices-because R&D has changed. Today, innovation requires the input of multi-disciplinary teams from multiple organizations, across various scientific functions, from different geographies and cultures. No single company has the resources to go it alone. Moreover, from a purely fiscal point of view, collaboration makes R&D budgets go further-reducing the duplication of research, sharing the cost of building common tools and solutions, and plugging potential skills gaps. Those that refuse to work with peers will find themselves falling behind the rest of the market. Collaboration not only accelerates research, but when we look to what the future holds, it is in fact the only truly viable model to foster innovation.

Take, for example, our ability to know more about the genomic stratification of patient groups. This has resulted in R&D becoming more complex and big breakthroughs less frequent; blockbuster drugs have given way to a new class of ‘nichebusters’. These niche therapeutics require considerable amounts of cross-domain data to develop. Not only to smooth the path of approval through agencies like the FDA and EMA, but to prove to payers the value of a drug or device. Collaboration will help to usher in common industry standards that govern data quality and interoperability. The Pistoia Alliance is currently developing, for instance, a Universal Data Model (UDM)-for the storage and exchange of experimental information about compound synthesis and biological testing. At present, considerable amounts of time and money are wasted developing unique solutions that cannot interact. This fragmented approach benefits neither patients nor payers in the slightest, and the UDM will go some way to solving this problem.

Commercially, it is vital companies overcome these hurdles-not only for short-term gains, but in order to facilitate innovation yet-to-come. In the future, life sciences companies will even need to be able to link with smart home devices such as Amazon’s Alexa and Google’s Echo-these integrations will not happen without collaboration. As a society, we are currently in the early years of being able to gain an in-depth understanding of our population through data, and this will develop rapidly as technology improves. Realizing the promised potential of these advances will require a group effort between many types of organizations, whether a cybersecurity firm to ensure the sovereignty of patient data, the manufacturer of implantable RFID chips to monitor patients, or the drug company to advise dosage for patient.


Creating a cultural shift towards collaboration

Making breakthroughs in this interconnected infrastructure will require a far higher degree of trust and the development of much closer working relationships than the industry is used to. But it is essential that stakeholders overcome this entrenched reticence, and move towards this collaborative model to better benefit patients. The first and perhaps easiest realm for collaboration is around clearly precompetitive activities, such as standards, best practices, and common requirements. Projects such as the HELM standard-which provides an open, freely available representation for macromolecules-allow disparate groups to exchange critical information using a ‘common language,’ unlocking the cross-collaboration model.

The need for sharing, however, goes even further than standards and extends to the actual data itself, such as from defunct research projects. Other industry figures have commented on this growing need to join forces. John Baldoni, senior vice president of platform technology and science at GSK, spoke in early 2017 about a partnership (Accelerating Therapies for Opportunities in Medicine (ATOM)) to advance Deep Learning in drug R&D. In particular, Baldoni has called for greater openness in contributing data, commenting, “There are hundreds of thousands of failed molecules or molecules no longer of interest with information on structures, analogs, toxicity, and structure-function relationships. Why would you not want to put them into the greater good? We feel there is an obligation that we have to patients in trials to share these failed compounds so we can develop better drugs faster.”

The pharmaceutical and biotech industry has typically been slow to share knowledge or embrace such openness. To make a greater level of cooperation possible, it is important it happens within a structured framework, using agreed standards and between organizations that trust one another. Organizations must change their outlook towards data sharing, recognizing in particular that pre-competitive data can benefit many companies, whatever their specialization. It will take an industry-wide effort to achieve these goals. The Pistoia Alliance was founded to help the industry navigate this transformational age, and offers a proven legal and operational framework for open innovation-enabling companies to benefit from pooled resources in a safe environment.

The pharmaceutical and biotech industry is at a tipping point, and will continue to come under scrutiny over the cost of drugs. Moreover, healthcare spending in the US is projected to be 19.9% of GDP by 2022, and the sharp focus currently on proving productivity, efficiency, and value, will remain. In light of the fact that nine out of ten drugs fail to make it to market in the first place, the benefits of sharing knowledge cannot be underestimated. The time for greater partnership is now. Industry stakeholders must share the costs of R&D, ensuring it has maximum benefit to their company and the industry as a whole, and crucially, helps the industry deliver on its quest to bring new medicines to patients. At its heart, successful science should be about successful collaboration.


Dr Steve Arlington is President of The Pistoia Alliance.

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