Pharmaceutical companies have played an essential role in advancing global clinical treatments and distributing life-saving medicines to those in need, whether simple painkillers such as Panadol or state-of-the-art cancer drugs such as Sorafenib. Recently, however, the pharmaceutical industry is in decline. Stagnating industry combined with under-resourced academia has prompted collaborations – such as joint research initiatives and resource sharing – that benefit industry and academia financially and also encourage further scientific discovery. This article aims to understand the challenges that have stimulated collaboration between commercial and academic-driven aspects of the pharmaceutical industry.
Challenges faced by industry and academia
Productivity and efficiency are two of the primary concerns of pharmaceutical companies today. Burt Adelman, a hematologist affiliated with Dyax Corporation and Brigham and Women’s Hospital, identifies the triple threat facing pharmaceutical companies: significant revenue declines from the loss of patent protection for high-value products, the rising costs of research and development, and an inadequate number of new product approvals to drive growth .
Analysis reports from EvaluatePharma, a leading consensus forecast analyst in the biotechnology and pharmaceutical sector, predict that 51 billion dollars worth of sales are at risk from patent expiration in 2015 alone . Meanwhile, the time and money required for research and development continues to rise (Figure 1). A typical drug requires an investment of 800 million dollars and 15 years before it can be sold on the market . This inflated cost accumulates as a result of the expensive and time-consuming phase 2 or phase 3 trials. A low success rate or a drug’s lack of efficacy is often determined after completion of these costly trials . On top of all this, drug discovery is fundamentally tortuous – poor understanding of biological systems forces research to rely on inefficient and “clumsy Edisonian trial and error” in the preclinical stage .
Academic institutions face other challenges as well. While universities possess a high concentration of human capital, they lack the necessary funding. Adjusted for inflation, the budget of the National Institutes of Health (NIH), the organization that provides money for and conducts medical research, has been on a ten-year decline, and the number of R01 grants – the primary grants supporting investigators’ research – is decreasing . In addition to less funding from the NIH, biomedical research at universities also lacks industrial resources such as high throughput screening and compound libraries, which allow researchers to effectively conduct chemical tests.
Pharmaceutical companies and biomedical research facilities are struggling to balance the high costs of research and development with declining funding and growth. In response, industry and academia are working together to overcome these challenges.
Benefits of collaboration: financial and scientific
Financially, collaboration between industry and academia benefits both parties. Due to the increasing costs of drug development, pharmaceutical companies are cutting costs and improving efficiency by outsourcing the earliest phases of drug discovery to universities. Similarly, tightening federal research budgets may make industry more attractive to academics, who would receive financial compensation for their research from the hundreds of billions of dollars resulting from drug sales  . The money derived from drug sales is important because it provides an alternative source of funding during a time when NIH grants are increasingly difficult to obtain.
Furthermore, universities do not operate commercially like pharmaceutical companies and they often lack the financial strength needed to own and operate many technical resources. Partnerships between industry and academia could alleviate this. For example, Pfizer’s Centers for Therapeutic Innovation (CTI) in Boston, New York, San Diego, and San Francisco provide academic investigators with access to important resources such as select Pfizer compound libraries, proprietary screening methods, antibody development technologies, and resources in protein science . These resources are a necessary investment in preclinical drug research. “Partnering with CTI has given me the opportunity to leverage Pfizer’s resources to accelerate the research in my lab,” says Dr. Harold Dvorak of the Beth Israel Deaconess Medical Center .
Scientifically, pharmaceutical companies lack one fundamental resource characteristic of academia – human capital. Harvard Business School Professor Gary Pisano argues that although clinical trials are often deemed responsible for the lengthy drug development process, firms also spend many years developing drug candidates that could potentially enter clinical trials . He adds that the immature science of human pharmacology results in the vast majority of drug candidates failing. By outsourcing preclinical drug research to university labs, which have made discoveries that long fueled industrial drug development, pharmaceutical companies save time and money, which could expedite the process of introducing drugs into clinical trials .
As industry and academia collaboration continues to increase, projects and initiatives will inevitably grow larger in scale. While the scientific component of these collaborations is straightforward, the business aspect is not. Science produces outcomes, but business generates the impact that delivers drugs to patients. According to a study conducted by researchers at MIT Sloan School of Management, there is an outcome-impact gap in university collaborations in which promising outcomes of university projects often fail to translate into tangible impacts for the companies involved . This study highlights seven key aspects to collaboration success (Figure 2).
If pharmaceutical companies want sustained drug discovery success, they should invest in integrating university labs with those of the companies, keeping in mind that location matters. A highly publicized example is the AstraZeneca MRC UK Centre for Lead Discovery, a joint research facility in Cambridge, United Kingdom between Astrazeneca and the Medical Research Council (MRC) due to be completed in 2016 . Commenting on the new collaboration, Professor Sir John Savill, Chief Executive of the MRC, recognizes the UK’s strength in discovery science . “I’d like to see that [discovery science become] much more accessible to industrial science, and I think that’s achieved by proximity,” says Savill, referring to the new center’s proximity to the MRC Laboratory for Molecular Biology . This is just one example of how partnership between companies and universities can improve the field of science, as well as contribute to overall business and economic growth.
References: Burt Adelman, “Opening up drug development to everyone,” Hematology (2013): 311–315  “World Preview 2016,” EvaluatePharma 2010, http://www.atebion-bds.com/pdfs/evaluatepharma_world_preview.pdf  Peter Gwynne and Gary Heebner, “Recent Developments in Drug Discovery: Improvements in Efficiency” Science Magazine, February 7, 2003  Ashutosh Jogalekar, “Why drugs are expensive: It’s the science, stupid,” The Curious Wavefunction (Scientific American), http://blogs.scientificamerican.com/the-curious-wavefunction/2014/01/06/why-drugs-are-expensive-its-the-science-stupid/  “Budget cuts reduce biomedical research,” Federation of American Societies for Experimental Biology, http://www.faseb.org/portals/2/PDFs/opa/5.16.13%20NIH%20Funding%20Cuts%202-pager.pdf  Heidi Ledford, “Drug buddies,” Nature 474 (2011): 433-434, http://www.nature.com/news/2011/110622/pdf/474433a.pdf  Mary K. Caffrey, “Collaboration Between Academia and Pharma to Bring New Therapies to Market More Important Than Ever,” American Journal of Managed Care, February 12, 2014, http://www.ajmc.com/publications/evidence-based-oncology/2014/february-2014/Collaboration-Between-Academia-and-Pharma-to-Bring-New-Therapies-to-Market-More-Important-Than-Ever  Gary P. Pisano, “The evolution of science-based business: innovating how we innovate,” Industrial and Corporate Change 19 (2010): 465–482  “Centers for Therapeutic Innovation: Translating Leading Science into Clinical Candidates Through Networked Collaboration,” http://www.pfizer.com/research/rd_partnering/centers_for_therapeutic_innovation  “Translating leading science into the clinic,” http://www.pfizer.com/sites/default/files/research/partnering/CTIBrochure_010914.pdf  Pertuze et al.,”Best Practices for Industry-University Collaboration,” MIT Sloan Management Review 51 (2010): 83–90  “AstraZeneca and MRC enter strategic collaboration to create new centre for early drug discovery in Cambridge, UK,” http://www.astrazeneca.com/Media/Press-releases/Article/20140328–astrazeneca-and-mrc-collaboration-joint-research-facility  “AstraZeneca and MRC to create new UK Centre for Lead Discovery,” http://www.youtube.com/watch?v=el2tCW2w-IU  John Arrowsmith, “A decade of change,” Nature Reviews Drug Discovery 11 (2012): 17–18
Image References: John Arrowsmith, “A decade of change,” Nature Reviews Drug Discovery 11 (2012): 17–18  Pertuze et al.,”Best Practices for Industry-University Collaboration,” MIT Sloan Management Review 51 (2010): 83–90
Alfred Chin is a freshman Neuroscience (Cellular and Molecular) major at Johns Hopkins interested in pursuing an MD/PhD and a career in medical research. Follow The Triple Helix Online on Twitter and join us on Facebook.