Co-Opetition in Drug Development

Despite the looming threat of shrinking drug pipelines, drug development during the past few years has not been as productive as it should be, which has left many pharmaceutical companies at risk. To combat this issue, pharmaceutical companies are partnering with third parties, such as contract service providers, universities, and not-for-profit organizations to consolidate development processes, drive down costs, and increase output. This strategy is not as simple as it sounds, and issues, such as confidentiality and ownership, can be challenging. When handled properly, however, cross-company collaboration can result in a more efficient and profitable use of data and staff.

Industry motivations

In an industry where developing one efficacious drug can take more than 12 years, cost $1 billion in laboratory and clinical research, and has a 95% chance of failure, making the right strategic decisions to maximize the quantity and quality of new compounds is paramount.

Pharmaceutical companies not only complete with their end-products (drugs), but also in processes and technologies. In the thrust to become leaders in drug development, companies have turned to external specialists for help. This strategy has been effective, but it has led to a leveling of the playing field. CROs have been given an increasing proportion of clinical trial and regulatory activities, often managing the entire clinical process for a drug, or even all drugs of a given company. In turn, consulting and system integration firms have been hired to help optimize processes and implement large clinical, regulatory, and management systems, such as enterprise resource planning systems, with the goal of bringing drugs to market more quickly and at lower cost.

This experience has resulted in a relatively small number of top-tier CROs and consulting firms that have implemented systems from a small and consolidating roster of IT companies. Pharmaceutical companies are becoming similarly "best in class" in process, technology, and offshoring and outsourcing resources.

Pharmaceutical companies acknowledge that they share the same issues with respect to patent expiries, high R&D costs, and suboptimal R&D output and, therefore, should collaborate to mitigate these challenges. This realization has introduced the concept of precompetitive collaboration or "co-opetition," whereby pharmaceutical companies parter with each other or with academia.

Co-opetition across the globe

One of the first initiatives of this type, the Clinical Data Interchange Standards Consortium (CDISC), was set up in 2000 by 32 global companies, as an open, multidisciplinary, nonprofit organization. Now with more than 200 members, it has established open standards to support the electronic acquisition, exchange, submission, and archive of clinical research data and metadata. This standardization has helped to make pharmaceutical R&D and regulatory approval more efficient by allowing collaboration among researchers, easier review of product applications by regulatory authorities, and development of clinical and regulatory software by vendors.

Regulatory authorities, such as FDA and its European and Japanese counterparts, the European Medicines Agency and the Pharmaceuticals and Medical Devices Agency of Japan, have also been early drivers of collaborative projects. Following publication of FDA's "Critical Path Initiative," (1) the Critical Path Institute (C-Path) was formed in 2005 as a public–private partnership between regulators and the medical-product industry. The aim was to accelerate the pace and reduce the costs by creating precompetitive standards for data, measurement, and methods for evaluating drug efficacy and safety. In October 2012, CDISC, C-Path, and FDA formed the Coalition for Accelerating Standards and Therapies (CFAST) to work with pharma and IT companies on developing and maintaining data standards tailored to individual diseases and therapeutic areas.

In September 2012, 10 pharmaceutical companies founded TransCelerate BioPharma as a nonprofit, precompetitive drug company, to develop shared industry clinical-trial solutions (2). Such collaborative initiatives offer potential benefit to the whole industry in terms of cost and productivity. Member companies may find it difficult adjusting to collaborative models and may initially be hesitant to share insights that could help competitors get to market faster. Companies with healthier product pipelines might also be less willing to collaborate with those with leaner ones. The gains to all companies, however, are likely to outweigh any perceived drawbacks.

Drug repurposing: tapping academia for new ideas

Another area of burgeoning collaboration is between pharma companies and academic organizations, companies are looking for alternative uses for failed or unexploited compounds. To get fresh ideas from the outside, they are enlisting the help of academia.

To this end, Roche has allied with the Broad Institute of Massachusetts Institute of Technology (MIT)/Harvard, and AstraZeneca with the UK's Medical Research Council. In another example, 10 pharma companies are partnering with the National Institutes of Health's (NIH) National Center for Advancing Translational Sciences (NCATS) on discovering new therapeutic uses for existing molecules. An earlier-stage program recently launched in Europe under the Innovative Medicines Initiative, with seven pharmaceutical companies pooling compounds from in-house libraries.

Involving outside parties in drug development raises questions about areas such as intellectual property and data ownership, publication rights, and timeline management. Industry has experience in third-party collaborations, including those with academia, and all of these potential issues can and should be addressed in the contracts between the parties.

ViiV Healthcare: collaboration to address a single disease

In a different model, GlaxoSmithKline and Pfizer founded ViiV Healthcare in 2009 as a commercial enterprise to focus on delivering advances in HIV treatment. Shionogi joined in 2012. Such a construction combines the complementary capabilities and pipelines of the member companies to deliver the financial strength and global reach to invest in the development of new HIV medicines. As with any joint venture, there are many details that must be agreed by contract and in spirit, for example assigning the initial and future value to each company's portfolio, agreeing to the proportion of equity ownership, and accounting for revenues and investments.

Further co-opetition opportunities

If an activity affects the whole pharma industry but does not lead directly to the creation of a new molecule that is differentiated in efficacy, safety, and cost-effectiveness, that activity is a candidate for co-opetition. For this co-opetition to be truly successful, pharma companies will need to be willing to share more than they might have felt comfortable doing in the past while defining good workable contractual frameworks to govern these new relationships with each other and with third parties.

If they can achieve this model successfully, and patient confidentiality and data protection between parties are ensured, we could expect new collaborations to form in more commercially sensitive areas, such as regulatory submission and compliance frameworks, genomic-data analysis, and sales and marketing.

Reference

1. FDA, Innovation or Stagnation: Challenge and Opportunity on the Critical Path to New Medical Products (March 2004), http://www.fda.gov/ScienceResearch/SpecialTopics/CriticalPathInitiative/CriticalPathOpportunitiesReports/ucm077262.htm, accessed Apr. 15, 2013.

2. TransCelerate BioPharma, http://transceleratebiopharmainc.com

Ed Currie is associate vice-president in the life sciences practice at Infosys in Basel, Switzerland, edward_currie@infosys.com