What does open innovation mean to pharmaceutical R &…

Pharmaceutical R&D is under pressure to counter rising operational costs, depleted pipelines and impending patent expiries. For many, this can only be achieved in the long term by increasing R&D productivity. Advances have been made through Computer Aided Drug Design, high-throughput techniques, and the ‘Omics’ revolution. But, what is the next step?

We believe that radical new ways of working and a culture of external collaboration are key elements in turning around pharmaceutical R&D productivity and bringing new medicines to patients faster and with more control on costs.

The pharmaceutical industry is faced with the challenge of constantly replenishing a product pipeline in the same way as many other sectors. Companies have come to realise that in order to increase R&D productivity they need to dramatically improve their ability to harness knowledge and capability residing both within and beyond their organisational boundaries. Open innovation – integrating internal and external expertise to focus on your major challenges – has delivered new, and previously untapped, sources of innovation and ideas across diverse sectors (see example below). It is only a matter of time before pharmaceutical R&D becomes fully engaged.

Global Innovation Scouts – BT Group

BT Chief Technology Officer Matt Bross shook up the company's inward-looking innovation culture after he joined the company in 2002. One key move was to station innovation scouts in India, China, Britain, Japan, and Silicon Valley to spot new technologies being produced by universities and start-up companies. The scouts vet the innovations and pass along the most promising ones to people within BT's R&D departments to pursue. As a result, the company has picked up technologies relating to home networking, collaboration technologies, and intelligent agents for customer service.

Open innovation in pharmaceutical R&D

Whilst open innovation in pharmaceutical R&D has been talked about for some time, it has only recently started to achieve the traction required for successful implementation. The barriers to full adoption are often centred on three key areas that remain unaddressed:

the need to undertake significant cultural change – creating partnerships to access external innovation and talent whilst avoiding the ‘Not Invented Here’ syndrome
the need to recognise and reward staff for value adding behaviours – reaching out and connecting beyond the traditional organisational boundaries
the need to align open innovation to the organisational strategy and put processes in place to measure the value created.

The barriers may appear challenging; but there are clear benefits for pharmaceutical R&D:

access to knowledge, innovation and talented individuals residing internally and externally through the development of high quality, reliable and extensive networks of strategic partners
delivery of projects rapidly by combining the best internal and external expertise
creation of businesses that are agile and responsive to change
maximisation of return on R&D investment.

Each of the three challenges need to be addressed but there is a recognition that implementation of open innovation will be different for each individual organisation. Therefore it is important to establish the appetite for open innovation that exists within your business and the extent of the change that will be required to realise the benefits.

Successful adoption of open innovation will require significant change

Access to external talent and knowledge and its integration with your internal capabilities will require change that needs to be planned and implemented in a manner that is sensitive to your current organisational culture. It is clear that this transformation can be complex and is yet to be achieved extensively in pharmaceutical R&D.

Our experience has shown that a successful open innovation system can only be developed with a structured approach that:

is led from the top with committed executive engagement
assesses the existing open innovation footprint of the organisation and the appetite for change
creates the vision and strategy for open innovation across the business
identifies the projects required to deliver the open innovation strategy
develops the organisational culture to support the implementation of open innovation
establishes the tools, techniques and partnering methodologies for effective collaboration within your business and with external organisations.