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Big Pharma become Team Pharma
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By Michael Woodhead, 6minutes editor
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Big Pharma has a big problem, and it is research productivity. Despite spending eye-wateringly large amounts of money on R&D, their labs are simply not delivering as many innovative drugs as they used to. There are various reasons for this, not least of which is that, research-wise, all the 'low hanging fruit' have been picked.
The spiralling costs of bring a new drug to market has seen a wave of mergers as pharma companies have sought to retain the critical mass needed to support R&D programs. Pfizer, for example, which spends something like $7 billion annually on R&D, has just announced a merger with Wyeth, which spends around $5 billion a year on research. But despite having a multi-billion research budget, the researchers at this new megalithic entity say they can't continue to operate in 'splendid isolation' to develop new therapies.
Last week I visited Pfizer's UK research facility in Sandwich, Kent, where we heard their head of R&D, microbiologist Dr Martin McKay, say that we still only understand about of 5% of biology. Given the high cost of doing research these days, he says it no longer makes economic sense for pharma companies to work in fierce opposition (or 'closed innovation' as they call it) on early stage research.
The way ahead is what they are calling 'pre-competitive collaboration' - in other words, working together and pooling knowledge and expertise on the pure research, and competing on the later stages to develop better molecules. An example of this is Pfizer's new partnership with GlaxoSmithKline in HIV research, 'Viiv Healthcare' which they say promises to deliver not just more antivirals, but also new understanding of the underlying immune dysfunction and of AIDS-related complications.
The company is also pooling resources with scores of smaller biotech companies, such as the Australian CogState, with whom they have developed cognitive function tests.
Pfizer says is also opening up to academia, working on ways of developing new relationships and intellectual property sharing with universities and research institutes in developing therapeutic areas such as the human genome and stem cell therapies.
Whether this will be enough to keep the pipeline of new products flowing remains to be seen. But Dr McKay says the old Big Pharma business model is broke - and needs fixing.
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