Last month, BusinessWeek published an article, "Mega Mergers Can't Cure the Pharmaceutical Industry," about how the Pharmaceutical Industry has been changing their strategy from a strictly competitive one to a more collaborative one because they can keep costs down by collaborating with each other and producing tangible for themselves and their customers.
In the Pharmaceutical Industry, R&D strategies have traditionally focused on "out-spending and out-innovating the competition", often through the merger and acquisition of startup companies. Unfortuntately, the costs of discovering, developing, and commercializing a new drug through the innovation-through-merger now exceeds $2.2 billion because:
mergers [have] typically contributed to declines in R&D productivity. Rather than streamline and focus R&D, management tends to retain most of the drug pipelines, physical assets, and R&D talent of the combined companies—which makes decision-making and resource allocation even more difficult.
Mergers are all very public, but lately, according to BusinessWeek, there have been "a recent string of quieter agreements that signal collaboration on research and development". Big Pharma is looking at how drugs interact with each other and how the combination creates a more effective.
The benefits are three fold:
- Companies can avoiding the shotgun approach of funding many similar products by funding only those products that have a high likelihood of showing real difference in medical outcomes
- Companies can avoid spending resources on a variety of duplicative ("me too") products
- Companies can distribute risk across all the partners adding a predictability to pipelines and long-term revenue
These were exactly the reasons that pushed AstraZeneca and Merck to work together to test a new, experimental cancer regimen based on a "cocktail" consisting of drugs made by each. If the approach doesn't work, the partners can kill both compounds early and minimize the cost. If it works, they'll have a more effective, proven cancer treatment they can get to market faster and cheaper. This approach does not reduce the competitiveness of the industry, but rather refocuses it on those areas where its true strengths lie—global footprint, access to emerging markets, and relationships with increasingly demanding regulators and reimbursement authorities
Innovation by collaboration has huge benefits for the partners and for their customers. As consumers of big pharma, we'll know more about drug interactions -- specifically those that produce positive health results rather than negative side effects -- which should make it easier to get the "second" drug we need from our insurance carriers.
The article's well worth the read, I'm glad to see Pharma coming to this model because This is something we do every day. It's something that we've always done at Single-Sourcing Solutions with our partners.
We call it the "Meta-Partnership"
We have strong meta-partnerships with a number of other PTC partners. By coordinating with these partners at the top level, our customers get the strength and experience of both companies and our entire network.
Our customers come from industries that are heavily regulated: They have labeling and packaging requirements that are severe, and their need to generate and publish accurate and timely product information is great. The ‘Write it once, publish it in multiple formats” capabilities that Arbortext has is strongly aligned with this business need. Arbortext offers these industries a solution that is seamless from end to end, generating XML content that can be published in multiple formats for multiple end receivers from one centralized repository managing the content.
Single-Sourcing Solutions believes strongly in creating healthy alliances with other partners so that we can leverage with each other and create an even stronger solution for our customers. Each of our partners has a unique position of specializing in a PTC product. We specialize in Arbortext. Others specialize in Windchill, or MathCad, or NetRegulus, or Relex, or Pro/E, or you name it. As our customer's business requirements grow and change, the whole network continues to be available to them.
Single-Sourcing Solutions and our meta-partners bring each other strength in expertise as well as a solid philosophy and practice in stellar customer service. We feel that these meta-partnerships not only strengthen PTC partners, but lend those strengths to our customers as well.