Dynamic pharma partnering for future mutual benefits

1st April 2013

Asea change is taking place in they way big pharma approaches its external relationships - from those that help fuel the pipeline to vendor partners who are helping manage certain enterprise functions.

Companies are undergoing a strategic rethink as they consider how best to access innovation, initiate process change to better prepare the business for existing and future market and regulatory changes, and ultimately improve productivity and efficiency. And their orientation for the relationship is changing as a result with an eye toward the long-term and an emphasis on the concept of partnership.

The concept of partnership and its myriad forms was a major theme throughout ISI's 7th annual eSolutions conference held in Barcelona last year. From partnerships to accelerate innovation in the lab to alliances that help manage the complexities of operating in a global market, industry thought leaders helped to demonstrate that pharma is most effective when all the cogs - internal and external - are working seamlessly together.

The pharma industry has experienced a convergence of factors forcing it to rethink the way it does business. These include heightened competition, shrinking pipelines in the wake of an innovation gap combined with patent expirations, the complexities brought about by M&A integration, globalisation, and a vastly altered regulatory environment.

On the R&D front, as hungry pharmaceutical companies have sought to satiate their need for richer pipelines the obvious target has been biotech.

Equally, industry has turned to other sources - contract research organisations (CROs), software vendors, business and process consultants - to get a better grip on an increasingly complex and competitive market.

While doing deals with biotech companies and outsourcing several strategic, albeit non-core capabilities, it is only more recently that changing market dynamics have forced pharma companies to adopt a more collaborative approach. The result is a new wave of partnerships at both the R&D level and in other key functions within the enterprise.

R&D deals

Not that long ago, pharma had the upper hand when it came to biotech deals. Large companies could pick and choose the products or companies that they were interested in and cement deals that often resulted in one-off payments for the biotech company and majority or even full product ownership and intellectual property (IP) transfer to the acquiring company.

As competition for biotech's R&D has intensified, biotech companies of all sizes and stages of development have become better positioned to negotiate the terms and conditions of deals.

Pharma, meanwhile, has begun to reconsider its own operations, recognising that isolated practices are failing to deliver results, and that partnering with agile, young companies and academic institutions provides diverse opportunities for novel product development. Furthermore, though the rewards may be shared and therefore not as substantial as a go-it-alone strategy, the risks are also spread.

During a presentation at the eSolutions conference in Barcelona, Craig Funt, executive director of R&D informatics at Bristol-Myers Squibb (BMS), spoke of a changing perspective across the industry, from early resistance by many companies to partnering to a broader recognition of partnership as the centerpiece to innovation.

There are some interesting examples emanating from this business rethink. One in particular that Carlos Buesa, ceo of Oryzon Genomics, referenced in his keynote speech at the conference is a re-purposed Eli Lilly as it evolves from a fully integrated company into a fully integrated pharma network. This is an approach that will see the company go further and further down the road of partnering a large part of the business while holding onto a few company-defined cores around its IP.

Partnering has long been the mantra at BMS, but in recent years the company has been remodeling itself and in the process is taking an even stronger partnership approach to all its dealings - with biotech firms, vendors and consultants, and customers. Funt noted that the company regards partnership as the key to its competitive success.

A next step will be to have some form of shared platform, managed by a security model, through which partners of a particular product can interface and access and share information.

"The definition of the enterprise has changed," Funt commented. "Today the enterprise is not just what's within the BMS walls; it's really this whole network business model of all of our partnerships that go beyond that."

Today's R&D partnerships are also not confined to big-small alliances, with a growing number of partnerships between companies that might be considered rivals, Buesa pointed out during his presentation. In April 2009, Pfizer and GlaxoSmithKline announced an agreement to form a company focused solely on developing HIV medicines. BMS is also partnering extensively with big pharma, including with Pfizer and AstraZeneca, Funt noted.

The final piece in the shift to a pharma R&D partnership model is open source. While barely touched upon by pharma as yet, Buesa considers this something industry will take more seriously in the year ahead. While companies will likely step carefully in this arena because of IP concerns, he noted that one area where open source has real potential for the industry is with toxicology data. Should that eventuate, it would open up a new realm of industry partnerships.

Regulatory pressures

Partnerships have evolved across the entire pharmaceutical chain as the trend towards outsourcing has gathered steam. An area that has attracted greater attention in terms of developing sustainable and successful relationships with vendors is regulatory operations and regulatory affairs.

This has been prompted by the multi-layered effects of the changing regulatory landscape. In the wake of several product recalls, regulatory agencies have taken a tougher line on safety. As a result, companies have had to become even more particular about how they gather, archive, and access data.

Then there is a growing global effort to standardise regulations, with more and more regulatory bodies pushing towards eCTD adoption. The eCTD, while a valuable way for companies to manage their regulatory lifecycle, brings with it additional time and financial burdens. During the conference, several companies shared the difficulties they faced in transitioning laboured, disparate systems to ones that allow more seamless access to critical information for preparing regulatory submissions in this new paradigm.

Many have been taking stock of their expertise and assessing what is a core competency and what tasks, while critical, don't bring competitive advantage.

David Licht, senior director of global regulatory and safety operations at Allergan, described how the company has turned to vendor partners at times to manage an entire submission, having the project manager from the vendor liaise directly with internal stakeholders.

Partners not only take on some of the burden of large, mission critical projects - such as clinical trials, manufacturing and regulatory- but also help to generate ideas and best practices for adopting new solutions and enhanced processes. As Licht noted, garnering the desired outcomes from such alliances requires managing the relationship with vendors and having an emphasis on long-term partnerships.

Vendors are equally keen to emphasise a more holistic relationship. Vicki Phelan, pharmaceutical practice managing director at EquaTerra, told the audience that while providers will still happily undertake 'lift and shift' tasks - such as handling IT solutions quickly and cost-effectively - the emphasis is on trying to help clients transform their business practices.

The result can be access to strategic thinking, process change to better prepare the business for existing and future market and regulatory changes, and ultimately improvements in productivity and efficiency.

Securing the deal

True partnership has some way to go as strategic thinkers within pharma companies battle a lockdown mentality that still exists within certain parts of the organisation. One such area of resistance is information security. In an industry where all information is potentially sensitive, not allowing access to information deemed highly confidential could conceivably result in not sharing anything at all, conference presenters noted.

Companies are looking for ways to respond. Funt noted in his presentation, for example, that BMS is assessing how it might develop security models that would protect sensitive information while at the same time allow the company to collaborate effectively with its partners.

Adopting a partnership approach as opposed to simply outsourcing tasks can help to ensure greater oversight. Frank Nogueira, group director of US regulatory operations at Roche, said that the company treats its regulatory submissions business process outsourcing partner as almost an extension of one of the company's own sites, with the partner using Roche's own document management tool and publishing tool, communicating with authors from pre-clinical to phase IV studies, and following Roche's standard operating procedures (SOPs). The company even audits its BPO partner regularly against Roche's SOPs.

Brave new world

For Funt, tomorrow's partnerships will extend beyond merely divvying up projects and tasks to establishing an environment and infrastructure in which partners - be they in R&D or other parts of the business - work together on projects.

- Adam Sherlock is Managing Director ISI Europe,





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