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In the period from the 1950s to 2013, the American Food and Drug Administration (FDA) approved 1346 new molecular entities (NMEs) or new biologics entities (NBEs). On average, the approval rate was 20 NMEs per year. In the past 40 years, the number of new drugs launched into the market increased slightly from 15 NMEs in the 1970s to 25–30 NMEs since the 1990s. The highest number of new drugs approved by FDA was in 1996 and 1997, which might be related to the enactment of the Prescription Drug User Fee Act (PDUFA) in 1993.
New drugs serving unmet medical needs are one of the key value drivers of research-based pharmaceutical companies. The efficiency of research and development (R&D), defined as the successful approval and launch of new medicines (output) in the rate of the monetary investments required for R&D (input), has declined since decades. We aimed to identify, analyze and describe the factors that impact the R&D efficiency. Based on publicly available information, we reviewed the R&D models of major research-based pharmaceutical companies and analyzed the key challenges and success factors of a sustainable R&D output. We calculated that the R&D efficiencies of major research-based pharmaceutical companies were in the range of USD 3.2–32.3 billion (2006–2014). As these numbers challenge the model of an innovation-driven pharmaceutical industry, we analyzed the concepts that companies are following to increase their R&D efficiencies: (A) Activities to reduce portfolio and project risk, (B) activities to reduce R&D costs, and (C) activities to increase the innovation potential. While category A comprises measures such as portfolio management and licensing, measures grouped in category B are outsourcing and risk-sharing in late-stage development. Companies made diverse steps to increase their innovation potential and open innovation, exemplified by open source, innovation centers, or crowdsourcing, plays a key role in doing so. In conclusion, research-based pharmaceutical companies need to be aware of the key factors, which impact the rate of innovation, R&D cost and probability of success. Depending on their company strategy and their R&D set-up they can opt for one of the following open innovators: knowledge creator, knowledge integrator or knowledge leverager.
Historically, research and development (R&D) in the pharmaceutical sector has predominantly been an in-house activity. To enable investments for game changing late-stage assets and to enable better and less costly go/no-go decisions, most companies have employed a fail early paradigm through the implementation of clinical proof-of-concept organizations. To fuel their pipelines, some pioneers started to complement their internal R&D efforts through collaborations as early as the 1990s. In recent years, multiple extrinsic and intrinsic factors induced an opening for external sources of innovation and resulted in new models for open innovation, such as open sourcing, crowdsourcing, public–private partnerships, innovations centres, and the virtualization of R&D. Three factors seem to determine the breadth and depth regarding how companies approach external innovation: (1) the company’s legacy, (2) the company’s willingness and ability to take risks and (3) the company’s need to control IP and competitors. In addition, these factors often constitute the major hurdles to effectively leveraging external opportunities and assets. Conscious and differential choices of the R&D and business models for different companies and different divisions in the same company seem to best allow a company to fully exploit the potential of both internal and external innovations.
This book investigates and highlights the most critical challenges the pharmaceutical industry faces in an increasingly competitive environment of inflationary R&D investments and tightening cost control pressures. The authors present three sources of pharmaceutical innovation: new management methods in the drug development pipeline; new technologies as enablers for cutting-edge R&D; and new forms of cooperation and internationalization, such as open innovation in the early phases of R&D. New models and methods are illustrated with cases from Europe, the US, and Asia. This third fully revised edition was expanded to reflect the latest updates in open and collaborative innovation, the greater strategic importance of venture capital and early stage investments, and the new range of emerging technologies now being put to use in pharmaceutical innovation.
In the era of precision medicine, digital technologies and artificial intelligence, drug discovery and development face unprecedented opportunities for product and business model innovation, fundamentally changing the traditional approach of how drugs are discovered, developed and marketed. Critical to this transformation is the adoption of new technologies in the drug development process, catalyzing the transition from serendipity-driven to data-driven medicine. This paradigm shift comes with a need for both translation and precision, leading to a modern Translational Precision Medicine approach to drug discovery and development. Key components of Translational Precision Medicine are multi-omics profiling, digital biomarkers, model-based data integration, artificial intelligence, biomarker-guided trial designs and patient-centric companion diagnostics. In this review, we summarize and critically discuss the potential and challenges of Translational Precision Medicine from a cross-industry perspective.