Externalisation of R/D projects in the pharmaceutical industry
Friday, April 3, 2009 - 06:52
For a number of years, pharmaceutical companies have been departing from a tradition of strict vertical integration to have economies of scale , looking to external sources for at least some of their novel technology and products e.g NCEs, NDDS, reformulation etc.
these may be through the means of
licencing( in/out)
R/D collaboration
co development of drug molecules
merger
acquisition( pfizer & wyeth , merck & schering plough, genetech & roche)
Pharmaceutical companies increased their external R&D alliances nearly six-fold on average. A large and growing proportion of pharmaceutical companies' R&D alliances are formed with biotechnology firms which have proprietary technology, due to financial and innovative pressures. Far from being temporary, this resort to external sources of technology in the pharmaceutical industry follows the trends of the wider industrial world towards functional specialization. Thus, biotechnology companies are increasingly taking on the role of suppliers of innovation. THATS WHY THERE ARE ON THE TARGET OF MANY BIG PHARMACEUTICAL COMPANIES.
Hidden benefits( of collaboration )can come in the form of innovations derived from preparing and organising the collaborative R&D alliance, the potential for improvement exposed in applying existing expertise to a new situation, the dynamic network generated by the collaborative R&D alliance itself, and the stimulating challenge of competition to parts of the organisation that are normally shielded from it.
in india itself many companies are going for theae sorts of alliance e.g
ranbaxy & GSK
merck & eli lily with piramal
astrazeneca with torrent
glenmark with elilily, merck &
CADILA & ELI LILY
there are academic -indusrry alliance
lupin & CSIR
ADVINUS & MERCK, DNDI
NIPER & BMS
LICENSING has changed the landscape of indian pharma as many indian pharma are going for these for R/D(outlicensing) , marketing(inlicesing) with a large no of companies are going for these strategies.
should that be the signal of end of completely in house developed drug (integrated drug discovery model)!!!!!!!!!!!!!!!!!!!!!!
pls comment!
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zarrinfaria
Fri, 04/03/2009 - 12:19
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Adopting any of the strategy
Adopting any of the strategy as mentioned by you are beneficial for companies ,it surely does not puts an end to the complete in house developed drug.....
Can you tell me out of the above mentioned strategies namely,megers,acquisition,in/out licensing,R/D collaboration and co-development which is the most advantageous with the perspective of the company....
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vikas
Sat, 04/04/2009 - 07:00
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mam that depends upon the
mam that depends upon the motive & size of the company
usually MNC go for merger/acuisition as they have the strength & intent for that.
when it comes to the indian pharma companies who does no have the strength to go for the complete R/D process itself these can go for licensing & collaboration. that would help them to strong at those stage where they hold the competitive advantage .
raghanaveen
Fri, 04/03/2009 - 15:34
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Well Mr.Vikas,
Well Mr.Vikas,
i got max knowledge regarding R/D through ur blog...hope ur blog will defenitely help me in gaining knowledge
Ragha Naveen
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vikas
Sat, 04/04/2009 - 07:20
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thank you sir
you can have any sort of information regarding pharma R/D ( business & commercial aspects ) if you desire!!!!!!!!!!!!
kranthikumar
Fri, 04/03/2009 - 16:26
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can you clarify it !!!
Dear Vikas,
Yes R and D has such a potential but can you give the exact statical data how much is each company spending on the RandD in India. I dont think even the big companies are spending not more then 15 on this. About collabration is it loose to company or benifit to it. Why they did not do this collabration till now???
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Kranthi
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vikas
Sat, 04/04/2009 - 07:18
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absolutely sir , they should
absolutely sir , they should have gone for that much earlier but problem was india's weak patent regime .
kranthikumar
Mon, 04/06/2009 - 15:49
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What ?
Dear vikas,
what do you mean by weak patent...
Regards
Kranthi
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khandelwal deepak
Fri, 04/10/2009 - 09:45
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GOOD IN TIMES OF RECESSION
DEAR VIKAS.
it is not signalling acomplete end towards in house drug development. because during these tough periods , these are the only methods(mergers/acquisitions, licensing), which will help pharma companies to cope up with recession and achieve economies of scale. because cost cutting is the need of the hour.
manthan.janodia
Sun, 04/12/2009 - 18:41
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Dear Vikas
Your concerns are quite genuine. The things you have mentioned are a part of companies' strategy to cost reduction. It is not that a company always is interested in outsourcing. It depends on the capacity and resources available with the company. Even when a company outsource the R&D work, it does not mean an in house work is halted. Company can still continue to work and identify new moelcules that they are very good at. Various companies have different molecules in development for various therapeutic segments and they would find a synergy for that. If another company/organization provides them synergy, it is good for industry.
I would give you an analogy for that. During exams you read the syllabus but a few chapters/ topics you don't understand. You go to your friend, who is good in that subject, to clarify that. The same friend has some doubt with regard to subject that you are good at. So you would clarify his doubts. In this way both of you would gain from each others knowledge. But that does not mean that you dont read for the subject. You still have to read the topics and understand better after clarification.
Same is the case with R&D. If there is an alliance, the company does not completely stop R&D. THey would look for other avenues.
I hope i have answered your query.
raghuips
Mon, 04/13/2009 - 07:29
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R&D = C&D
I would like to share my prediction,
During recession times, all MNC companies are looking forward to work with India R&D companies for integration and with the concept of “Connect & Development” instead of old philosophy R&D because it makes simplification of process and decrease time from development to product launch.
Hopefully all MNC will come to India soon and we all having bright future who are in R&D.