Open Innovation in Big Pharma, GlaxoSmithKline Leads the Pack
What are the big pharma companies doing on open innovation and external collaboration? Do they have specific point of entry platforms/portals for external collaboration in the pharma industry? Other initiatives?
I did a quick and dirty survey on the 10 largest pharma companies by revenue (Source: Wikipedia).
I looked at their point of entry platforms/portals for open innovation or external collaboration – if they had any, the number of Google hits related to open innovation and the number of current employees having open innovation in their titles.
This is what I found (companies are listed in order of revenue):
1. Johnson & Johnson
Point of entry: Did not find any. Standard R&D site.
Google hits (J&J, open innovation): 19,800
Number of employees with open innovation in their title (LinkedIn search): 0
2. Pfizer
Point of entry: Standard site on Licensing & Alliances.
Google hits (Pfizer, open innovation): 7,670
Number of employees with open innovation in their title (LinkedIn search): 0
3. Roche
Point of entry: Did not find any. Standard Partnering site.
Google hits (Roche + “open innovation”): 14,000
Number of employees with open innovation in their title (LinkedIn search): 0
4. Glaxo Smith Kline
Point of entry: Innovation at GSK – a well-developed site
Google hits (GSK + “open innovation”): 10,100
Number of employees with open innovation in their title (LinkedIn search): 4
5. Novartis
Point of entry: Did not find any. Standard R&D site.
Google hits (Novartis + “open innovation”): 24,100
Number of employees with open innovation in their title (LinkedIn search): 0
6. Sanofi-Aventis
Point of entry: Did not find any. Standard R&D site.
Google hits (Sanofi-Aventis + “open innovation”): 2,000
Number of employees with open innovation in their title (LinkedIn search): 0
7. AstraZeneca
Point of entry: Did not find any. Standard R&D site.
Google hits (AstraZeneca + “open innovation”): 3,530
Number of employees with open innovation in their title (LinkedIn search): 0
8. Abbott Laboratories
Point of entry: Standard site on Global Licensing.
Google hits (Abott Laboraties, open innovation): 6,450
Number of employees with open innovation in their title (LinkedIn search): 0
9. Merck & Co.
Point of entry: Did not find any. Standard R&D site.
Google hits (Merck, open innovation): 7,640
Number of employees with open innovation in their title (LinkedIn search): 0
10. Bristol-Myers Squibb
Point of entry: Did not find any. Standard R&D site.
Google hits (Bristol-Myers, open innovation): 2,440
Number of employees with open innovation in their title (LinkedIn search): 0
Some of the above companies most likely have interesting open innovation-like initiatives that I missed. Perhaps they also use other words to cover open innovation in their industry.
Nevertheless, I find it a bit strange that it is so difficult finding their dedicated platforms or portals for such activities – if they have any at all. Communication and branding is becoming increasingly important as innovation goes open and global and these companies seem to have missed this.
It is fair to say that open innovation tend to be more difficult in industries that require a high level of intellectual property rights, have huge product development costs and longer development cycles. This might explain this state of open innovation in the big pharma companies.
However, I have read many reports and articles that indicate that big pharma companies buy into the idea of open innovation. This brings attention to one of the key objectives of open innovation which is to become the preferred partner of choice and be able to build a strong ecosystem with the best partners.
This race is on. Which companies – given their respective sectors within pharma – will win? In my view, GSK seems to be best positioned having a dedicated site and being the ONLY company with employees having open innovation in their titles.
Hi Stefan: You've done a nice job in taking a snap shot of some of the more prominent category players. Your results make the point that OI plays a less obviously prominent role in Pharma's growth strategies. This is probably true. However, your methodology (though perfectly reasonable for what you were seeking to do) has limitations that might cause us to judge a company's activities in open innovation simply by their web presence (or not). Companies that don't have public or publicized open innovation web sites may still be engaged in its practice. They may prefer to keep a lower profile or to manage their OI programs on a more B2B basis, rather than inviting consumer participation.
For instance, I'm aware that Johnson and Johnson has a web portal for inbounding external submissions (Intelli-Ideas). It also does a nice job of informing you when a submission progresses from one evaluation stage to the next (or has been rejected). J&J, in my expereince is one of the companies that tends to play its cards pretty close to its vest, so I'm not surprised that it is taking a less public approach to OI.
Novartis also accepts and manages external submissions, although they seem to handle things on a pretty ad hoc basis. I've also found in my dealings with Novartis, that their evaluation standards for external submissions are pretty rigorous. Therefore, they may not choose to maintain a very public face about OI…although they do list on their site the various alliances in which they are engaged. My sense is that for the reason I've mentioned, OTC's are more open to OI than Pharma's or Pharma's with OTC divisions. GSK appears to be an exception at this juncture.. It would be interesting to learn more about how they are applying OI to build their businesses.
Best regards,
Michael
Hi Michael,
You are right that my methodology has limitations and I appreciate you taking the time of sharing other examples.
However, I have a hard time understanding why companies do not want to be open about their open innovation programs. This just sounds like a contradiction of terms to me. All companies have activities within their innovation programs that they only want to do with selected partners, but if you decide to go open then you also need to understand how important it is to communicate about these efforts.
I also know of a couple of initiatives by J&J, which also has some difficulties communicating about their efforts due to the many companies they operate. Again, thanks for providing input on this and other cases. And yes, it will be interesting following GSK and their initiative.
Stefan
Stefan,
As an opening line of enquiry you have made a 'first pass' assessment but you might be looking at this with the CPG perspective and I think the Pharmaceutical business is different on many aspects.
Drug related research is highly specialised, has long paybacks (sometimes 10- 20 years), high risk/ high investment. These factors alone place it in a totally different league to CPG. Could they be more open in collaborations, most probably but we need to take care we are comparing 'apples with apples'.
There is a lot of research into innovation within Pharmaceuticals and Healthcare manufacturing, written by McKinsey, Booz, BCG, Roland Berger, Accenture and Monitor in the past few years. The industry is grappling with a significant need to change its total Business Innovation Model.
There is arguments about a number of constraints that impinge on openness considerably, to summarize"
1. Project portfolio blindness/ constraints/ lock in
2. Scale of challenges attempted (block buster drugs)
3. The place or (lack of) incremental innovation
4. Innovation skunk works still operates in many disrupting ways
5. idealisation trap
6. Short termism interrupts/ disturbs the longer term need.
7. The shift towards Generic solutions
8. Public Service and Insurance intervention
All of these can be opportunities and that is what the industry is grappling with, along with many other global and research issues.
Open innovation, more open to selected collaborations has gone on for years, even decades so open innovation as such is not seen as such a game changer as it is believed in the CPG- where I still have reservations on this point also.
Recently Deliottes conducted a report specifically at open innovation within Healthcare and Manufacturing looking at OI in direction, resource needs, implementing and establishing a culture to manage this.
Two conclusions from this Deloitte report on OI specifically:
1. Overall, most of the companies we spoke to are already gaining valuable benefit from OI. Virtually all intend to further develop, scale up and refine their OI capabilities and approaches. Nevertheless, they do not underestimate the challenges ahead in creating significant competitive advantage from what is essentially ‘innovative innovation’.
2. The healthcare companies we interviewed were generally taking very measured steps in OI, perhaps restrained by concerns over protecting core know-how and technologies, and few if any of our respondents in the Consumer Goods sector were aspiring to
the wholesale, company-wide top-down OI change programme adopted by Procter & Gamble.
The last comment on CPG's also not aspiring I found interesting and does this fly in contention with your thoughts?
Regards
I'm sorry if I'm hogging this blog but I want to offer a couple of other observations.
I've just been reading an Insead sponsored conference (http://fwd4.me/JoW) and four points seem to amplify differences and point to opportunites to do things in different ways between industries and why open innovation is clearly seen in contrasting ways.
1. According to Franz Humer, Chairman of Roche Holding, they need about 20 to 25 years from the germination of an idea to the “possibility” of a medicine. Suffice to say, “enormous amounts of money” are also required, as it takes “north of a billion dollars” to develop a new drug today.
2. He further went on to say "Part of innovation is failure; there is more failure in innovation than there is in success. If I look at our 10,000 scientists who work for us, their chance of ever participating in creating a successful product is zero". ZERO!
3. According to another panellist "Joe Saddi, Chairman of management consulting firm Booz & Company, agrees that the innovation cycle differs by industry.
4. Regardless of the motivation, all forms of innovation have one thing in common –the cycle never stops. “If you look at the way medicine is practised, in 50 years from now, people will look at the year 2010 and classify it as the Middle Ages,”
It can be often hard to compare across industries.
I would like to comment that Pharma companies do indeed run open innovation projects but often through open innovation service providers. Some openly and some anonymously. NineSigma has many of the companies cited as valued clients. The advantage of NineSigma being speed and the ability to target appropriate audiences rather than relying on serendipity through a corporate website portal.
Pharma has a history and well established mechanisms for taking in new drug candidates from outside. The stakes may be too high for true OI to be practiced in this area. But as in any organization, innovation needs are various and across the value chain. OI can be used effectively in many circumstances.
OI projects for Pharma are often tactical or enabling against a bottleneck or white space. To illustrate, a small selection of some of the many OI projects (by title only) managed by NineSigma related to Pharma are given below. Many have uncovered interesting solutions from unobvious groups which have helped our clients move forward in their product development efforts
Sustaining Life In Vitro
Seeking Human Clinical Models for End Benefit Claims
Skin Chemical Absorption Models and Assay Technologies
Antibody Purification Media for High pH Cleaning
Analysis and Measurement of Airway Congestion
Automated Biological Collection System
Improved Cell Culture Systems for Detecting Repeat Dosage Effects
Metabolic Modifiers via Viral Translocation Vectors
Development Partners for Nasal Formulations and Delivery Devices
Technology to Separate Racemic (R,S) Lactic Acid
Bacterial Spores Control Technologies
Improving Fungal Cell Permeability and/or Reducing Efflux Mechanisms
Regulating Gene Expression in Murine Skin in vivo
Low Energy Sterilization Technology
Breakdown of Advanced Glycation End-Products
Fatty Acid Synthesis
Kinase Inhibitors
Seeking In-package Sterility Assurance Technologies
Dehydration Processing and Technologies Advisory Board
Complex Oligomeric Components of Botanicals Analysis
One-Step Routes to Aniline Production
Large Scale Biochemical Hydrogenation of Nitro Aromatics