Acid observations of the daffier side of the mobile communications business. We take no prisoners.
This year alone pharmaceutical companies will invest over US$60 billion in R&D and this figure is set to grow at about 10 per cent every year for the foreseeable future. At the same time, the use of the internet in R&D activities is also growing rapidly. However, a new report from Andersen Consulting suggests that few companies are making maximum use of the Web's power, mainly because of concerns about the security of proprietary information and patient confidentiality.
R&D and the Internet (*) suggests that pharmaceutical companies will use the internet to outsource even more capabilities to specialist suppliers, helping to create a network of faster, deeper collaborations within and beyond their own organisations. As R&D activities become genuinely avirtual', the winners will be those who can use the technology and integrate the results into successful launches.
Use of the Internet will further change the way skills are deployed to discover and develop drugs, particularly by making the flow of information between company and outsourced supplier easier and cheaper. A pharmaceutical company will be able to gain access to world-class skills from specialised suppliers, irrespective of ownership or physical location. Such suppliers will emerge and grow because they can find customers, receive and process data and send it out over the internet, without incurring the costs of creating a fully-integrated company. They will focus on skills that, while expensive to maintain in larger companies, are still vital to the delivery of drugs. However, the interest of contract research organisations (CROs) and study management organisations in doing business over the internet is only the first stage of this trend.
One of the critical skills for the successful pharmaceutical company of the future will be the ability to knit together performance at an industry best practice level from a multitude of these suppliers. Companies will be competing for partners in an internet marketplace: finding, tracking and leveraging them to foster continuing relationships and moving on when better partnerships arise. "For the traditional pharmaceutical company, opportunities will also emerge to sell their own surplus capacity, be it in skills or compounds, through internet businesses,“ notes the report.
Overcoming barriers
The history of the development of technology in R&D has been one of the creation of systems that support individual functions but which are poorly integrated across the company. This has been particularly visible after mergers where systems integration has taken years. Attempts to dismantle organisational functions and departments in the search for speed have met with marginal success often floundering when they reach barriers presented by legacy systems.
The application of internet technology will help to eliminate some of these barriers, says the report. Professionals are now becoming more comfortable with the internet and its particular style of information provision. Making information available inside the company, through the use of internet-style search engines, browsers and portals reduces the barriers between departments and functions. Bringing suppliers and alliance partners into the same structure makes them feel more like part of the organisations, blurring barriers between internal and external resources. This picture will be complete when even truly external bodies, such as regulators, are brought into the internet-enabled flow of information.
However, the ability to use world-class skills irrespective of location and to access information across functions challenges the business models currently used to manage R&D. The fully-integrated organisational model will restrict success in the future because it does not allow virtualisation and knowledge integration.
According to the report, companies will have to choose where to position themselves on the spectrum from on one extreme the traditional, fully-integrated model and at the other a model where they form a abackbone' which holds together an array of suppliers, each of which has a specific capability in one particular process area. The challenge then becomes one of managing the transition from the current position to the desired one. The difficulties faced by the discovery operations in setting up and managing their academic alliances and the troubled relationships between CROs and development functions indicate some of the issues to be faced. The winners will be those capable of making a staged withdrawal from areas previously considered acore' and of setting up a flexible structure that allows other companies to be abolted in and out' as needed.
Supporting scientific insight
In the past, a significant proportion of the time available to analyse and review data in search of insight has been spent on the search for information. At first sight, the rapidly-growing body of science- and health-related information on the internet would seem to add to this problem. Finding new sources, locating relevant information and sifting information to glean the critical elements is not straightforward, particularly when the credibility of the source may be hard to verify.
However, the report notes that the internet does offer opportunities that better support scientific staff. New search methods will access a broader range of sources and tailor the structure of information to suit the researcher. Scientific collaborations will be initiated and run over the internet and organisations that trade in specific aspects of scientific information and the tools to analyse it will emerge.
In the future, scientists and managers can expect to base their insights on a greater array of data, bought to their desktop and made ready for use by intelligent search engines. Using these tools, scientists will have the ability to pull information regularly from the internet and keep up to date with relevant information from related disciplines. As a result, scientists will gain a competitive advantage with respect to the speed and breadth of their research and their increased ability to analyse rather than merely mine information. Also, as the internet lowers barriers to working together, new relationships will form more easily between co-workers who are often spread across the globe.
Health- and disease-related searches represent one third of all the searches conducted on the internet. The web has opened new channels to the consumer, from the specific sites providing medical services, the professional and charitable bodies offering advice and counselling to the chat rooms that bring together people with similar conditions or concerns. So there is a growing body of information available and companies are now forming with the aim of getting ownership or control of a critical mass of information in order to dominate specific areas.
(*)For more information or copies of R&D and the Internet contact Stacey Jones at Andersen Consulting, email stacey.jones@ac.com. The report's authors are Fraser Skirrow and Dr Pradip Banerjee, both with the company's pharmaceuticals and medical products division.
