In recent years major pharmaceutical companies have re-organized their R&D structure via M&A, external partnerships, out-sourcing and open innovation. Pharmaceutical companies have started adopting open innovation model for commercial success, due to the struggles related to bringing ‘first-in-class therapies to the market, patent expiration of the existing blockbuster drugs, reducing the R&D as well as the prescription drug cost.
Open innovation model not only helps in commercial success but also, aids in exploring the new horizons in partnership opportunities. A decade ago there were a dozen were nearly dozen of drug discovery centers in the US compared to today that are close to hundred. Open innovation offers many advantages to all the stakeholders:
With open innovation, the operational boundaries of all entities expand in terms of geography, technologies, corporate culture, etc. which otherwise would have been restricted. Interdependency becomes an easy task with open innovation which helps in reducing the cost, shorten product development cycles, etc. leading to higher return on investment when compared to complete dependence on in-house development.
There are many big pharmaceutical companies which are using open innovation; AstraZeneca and Eli Lilly were the first companies to adopt the open innovation in practice. AstraZeneca in 2012 shut down its entire neuroscience project and created a new “Virtual Neuroscience Innovative Medicines Unit”. This new unit was tasked with identifying and developing external drug discovery opportunities with shared cost, risk and reward. And Eli Lilly’s OIDD platform enables phenotypic and target-based screening of the biologically active molecules or compounds.
Moving ahead of the open innovation which in few years will be adopted with certain changes and modifications according to the need of a specific company. Collaborative innovation centers, by Pfizer, GSK, Merck, Bayer and Janssen are taking the open innovation to the next level.
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