Translating Biomedical Innovation / Mental Health and well being
Managing Ideas: Commercialization Strategies for Biotechnology
This article by Joshua and Scott Focuses on the commercialization aspect of biotechnology and stresses how important it is for innovators in the new and fast developing field of biotechnology to effectively forge collaboration with existing pharmaceutical market leaders in order to successfully create a new and strong value proposition for the healthcare sector. Biotech firms have not been able to challenge traditional pharmaceutical companies as they were expected to. The market control of powerful pharmaceutical giants, the risk of expropriation of innovations and the poor integration strategies are responsible for why many biotech firms struggle for their survival. Already faced with huge costs of innovation, biotech firms also have to deal with more hurdles in the form of product development, regulatory issues, marketing and distribution challenges. These challenges explain why biotech innovators have not been able to displace the established pharmaceutical firms. These challenges also explain why we see an increasing number of contracts and collaborations between biotech firms and pharmaceuticals. The authors of the article discuss the various strategic and business issues pertaining to the trend of cooperation between biotech innovators and established pharmaceutical companies. The authors also discuss the advantages and the dangers involved in such a business strategy for the innovator.
As an early and important case study (1978) of the smart strategic partnership between a biotech firm and pharmaceutical giant, the authors discuss the collaboration between Genentech and Eli Lilly for the successful production and marketing of human insulin. This, the authors point out, “set out the pattern of contracting,” which is crucial for the success of innovative biotech breakthroughs. Carl Feldman, president of the biotechnology industry organization said, “strengthâ€¦is reflected in the proliferation of collaborations and partnerships, which are the lifeblood of biotechnology. In year 2000, there were five times as many new deals between biotechnology companies and pharmaceutical companies as in 1993.” [Joshua S. Gans, pg 6] These statistics reflect the growing trend towards collaboration as more and more biotech firms realize the advantage of collaborative partnerships with established pharmaceuticals in favor of developing an entire new value chain. This is because, invariably, the development and marketing costs of the new product is many times higher than the initial research costs. So entering a contract with a pharmaceutical company, which already has an established value chain, including the development, marketing and the regulatory process is a smart choice for the new biotech firms.
Having said this however, the authors also warn of the potential dangers in such collaborations in the absence of “effective intellectual property protection.” The degree of appropriability or the ability to control innovative knowledge is crucial for the success of this collaboration. In the absence of strong appropriability it is possible that innovators would end up victims of expropriation. Though IP protection is widespread in the biotechnology domain, there are still significant challenges in ‘patent portfolio management’. Weak IP protection limits the reign of a firm’s technological leadership, as other competing firms are able to easily duplicate the innovation. So the choice of commercialization strategy is dictated by the two main factors namely, complementary assets that include the infrastructural and marketing capabilities and the degree of appropriability. (IP protection). The famous litigation between Amgen and Johnson & Johnson over the anemia drug EPO, is a clear instance of how the collaboration between a biotech innovator and a pharmaceutical partner could misfire. [pg 11] So the new biotech firm has to carefully assess the commercialization environment before it ventures into a strategic business partnership with existing pharmaceutical companies or decides upon independent production and commercialization. The latter approach, as the authors feel, is more feasible when there are less regulatory hurdles. A case in point is Genzyme opting to chose an independent commercialization strategy for its drug Ceregen, useful in the treatment of Gaucher’s disease, a rare condition with no known cure in the past. Several factors including the rare and severe nature of the condition, easy identification of the patient base, and the low cost of development justified the choice of Genzyme to develop the entire value chain from the scratch. [Joshua S. Gans, 12]
The fear of expropriation affects potential collaboration between innovators and established companies. Pharmaceutical companies can help to lessen these fears by developing good reputation and a policy of fairness in the collaboration. Also, signing non-disclosure agreements with the innovators could help to mitigate their concerns about the sharing of their ideas. The authors also point out the potential role for individual venture capitalists as third party ‘idea brokers’. [Joshua S. Gans, pg 20] When IP protection is very strong, developing a new value chain is not cost effective. The market forces determine a natural trend towards collaboration. Under these conditions the probability of cooperation increases by 400%.
Success in innovation is determined by the profitability in commercialization of the innovation. Biotech firms have to make judicious business choices that increase their profitability. These include producing ‘High quality innovations’, making their innovation visible to potential partners, (to increase their bargaining power) and excellent appreciation of the advantages of independence over contracting along the different stages (early innovation, refinement, production, regulatory hurdles, marketing, etc.) of the product development. In short, success for biotech companies lies in their focusing on their core competence, producing high quality innovations and forging collaboration with established commercialization partners. Paradoxical, as the authors surmise, this might necessitate biotech firms to cooperate with “precisely those firms who might have been their biggest competitor.” [Joshua S. Gans, 19]
1) Joshua S. Gans & Scott Stern, ‘Managing Ideas: Commercialization Strategies for Biotechnology’, Melbourne Business School.
Sponsored Research and Public rights to Know
In the article ‘Sponsored Research and Public rights to Know’, Raymond Fresko and Hind Merabet explore bioethical issues involved in the scientific research collaborations between the academic institutions, government laboratories and the corporate sector. The authors discuss how the government has introduced rules and regulations pertaining to funds allocation for research and promotion of increased collaboration between the three contributors at the same time protecting institutional interests and public health interests. In particular, the article focuses on the bioethics of the promising, controversial and fast developing field of human embryonic stem cell research. With the growing public and political outcry about the ethics of production, and use of human embryos, public funding for research in this area has been limited giving rise to an increase in growth of privately funded research. The authors express their concern that this financial aspect of the research, either institutional or privately funded, has a contorting effect on the dissemination of the findings of the research. This article focuses on the research cooperation between the three sectors namely the academics, federal and corporate sectors and the conflicts of interest arising out of their different vested interests.
The Bayh-Dole Act of 1980 is widely regarded as the main government initiative to formalize and to promote the relationship between academic and federal research labs and private corporations. This act is credited with the promotion of “collaboration between commercial concerns and nonprofit organizations, including universities, and facilitated “the utilization of inventions arising from federally supported research or development without unduly encumbering future research and discovery.” [Raymond S. Fresko, pg 104]. To follow suit was the amendments to the Stevenson Wydler technology act that permitted government laboratories and research facilities to directly enter into collaborative research and development agreements (CRADA) with private research firms and educational institutions. The goal of the act was to make available federal research facilities and personnel for collaborative research, with the funding contributed by the private research firms. The Federal Technology Transfer Act was also suitably amended to let these private companies retain the licensing rights for such research. As a success of such collaboration the authors point out the successful development of the cancer drug, Taxol that was the most popular anti-cancer drug of the year 2001.
The field of embryonic stem cell research however, was hampered by funding constraints with the 1996 government ban on the use of federal funding for research on embryos that were “destroyed, discarded, or knowingly subjected to risk or injury or death greater than that allowed for research on fetuses in utero” [pg 104]. In 2000, the National Institute of Health released new guidelines for federally funded research on embryonic stem cells breaking the impasse that had totally stalled the federal research in the field. The new guideline permitted embryonic stem cell research, “only if the cells were derived without Federal funds from human embryos that were created for the purposes of fertility treatment and were in excess of the clinical need of the individuals seeking such treatment.” [Raymond S. Fresko pg 105] Also, the government ruling in Aug 9, 2001, restricted the research on embryonic stem cells only to stem lines derived at that time. These limitations had an overall effect of diverting most of the research on embryonic stem cells to the private sector. With the ethical compliance requirements not so transparent in the private sector and their primarily commercial interest in biomedical research leads to several problems. In a collaborative setting, conflicts of interest arise out of such a situation. For instance, as the authors state, a federal research employee “would have official responsibilities with an outside organization with which that employee has a financial interest or affiliation.” This automatically puts them “in the position of having an official responsibility or action which could directly influence his or her own financial interests, or those interests which are imputed to him or her.” [Raymond S. Fresko, Pg 106] In general, the ethical liability involved in privately funded embryonic research is all the more reason for the federal government to actively sponsor the research. This would also ensure commercialization of stem cell research without ethical compromise, as research would be subject to stringent review requirements.
Academic research is in general perceived as a purely scientific endeavor not marred by commercial interests. However, as the authors discuss conflicts of interest could even affect institutional research. This is more likely if the institution has a financial link to the organization in the form of equity, ownership or sponsorship. As a case in point is the association between Scripps research institute, a scientific institute in California and Sandoz the Swiss pharmaceutical company. It was publicly disclosed that Sandoz struck a deal with Scripps institute to contribute $30 million every year for 10 years in exchange for the commercial license and rights to all the new discoveries by the institute. Invariably, collaboration with financial strings attached lead to what is known as “publication bias” where “commercial stake” affects the outcome of the study. This could also come in the form of attempts to suppress the publication of research results that could affect the commercial interests of the funding firm. Furthermore, academic researchers who have signed a non-disclosure agreement with corporations would not share their research results with peer researchers, which undermines the fundamental values of educational research. Commercial research is largely profit centric while public health interests take second place. Commercial research on stem cells has also failed to deliver the miracle cures that were promised for many chronic and fatal conditions. This could be evidenced from the field of cancer stem cell research. Pharmaceutical companies have largely stuck to the tumor regression treatment while prophylactic treatment for metastasis has remained largely neglected. The reason being the difficult regulatory process involved in the later case. This trend wherein pharmaceuticals are contended in making what the author calls the ‘Billion dollar blockbuster’ drugs does not serve the public health interest in the best way possible.
In conclusion, the authors call for ‘increased moral accountability’ from the different partners in new biomedical drug research as an essential prerequisite for the effective translation of technology into clinically promising therapy that improves the outcome for patients suffering from chronic and currently incurable conditions. The trend to overstate the promises of such novel therapies as stem cell therapy or to manipulate research findings, guided by commercial organizational interests, should be avoided. The authors conclude by stating that biomedical research should adhere to strict ethical standards and public should be informed of the factual report of the research findings as they have the right to know the truth.
1) Raymond S. Fresko & Hind Merabet, ‘Sponsored research and the Public’s Right to Know’, Drug Development Research 63:103 — 111(2005)
A new drug development is a prolonged, knowledge intensive and costly process, which every pharmaceutical company has to go through before it could successfully bring out a drug from the laboratory to the market. The drug development process involves a collaborative effort from researchers with different backgrounds including organic chemists, physiologists, toxicologists, pharmacologists, statisticians and even computer experts. Several stages are involved in the new drug development process. These include the ‘preliminary assessment’ ‘ detailed business case preparation’, ‘product development’, ‘preclinical and clinical testing’ and the application for the investigational new drug status with the FDA after which the drug becomes available for the physicians to prescribe to patients. So essentially the NPD process includes all the stages from idea generation to idea screening to concept development and testing, business and market analysis, product development and commercialization. Understanding the NPD cycle is important for firms to carefully plan the resources necessary for the product development and the release of new products into the market. Also understanding the NPD cycle and the cost of the different stages of drug development are crucial for a firm to make strategic business decisions. For instance most new, small to medium level research firms would be heavily burdened by the cost of clinical trials as clinical trials are known to constitute almost 45% of the functional cost of new drug development. [Venkatesh Gopal] Therefore understanding the NPD cycle along with the costs of different stages enables them to enter into production and marketing contracts with well-established companies that can fund these expensive phases of the product development cycle.
I learnt about funding organizations from organizational websites. Particularly the website of the American Association for the Advancement of science (AAAS) provides a detailed listing of the association of the various federal and HHS grants. Other websites such as the Illinois researcher information service (IRIS) and the government website Grants.gov carry a listing of many funding programs that are available for medical researchers.
1C ) One of the important business strategies for an organization involved in new drug development is the decision on whether to outsource product development or to develop it in their own organization. This choice is crucial and requires a careful appreciation of the cost factors and other market dynamics. There are risks involved in outsourcing product development. Particularly if there is weak intellectual property protection the innovator is at risk of having their hard work duplicated by the collaborator or even other competing organizations. However, if there is strong IP protection and significant technological complexity and costs are involved in setting up a production center, then it is a strategically wise choice to enter into a contract with an established pharmaceutical production company and outsource the production and commercialization part of the new product development cycle. If there is weak IP protection and high technological complexity and costs, then the developer should invest in the entire value chain. If there is low IP protection and low technological complexity and cost, then the innovator should only outsource selective components of the production and keep the main aspects such as product assembly and testing within the organization. The following diagram depicts this combination of factors and the recommended business model choice for the pharmaceutical or biotech firm engaged in research and development of new drugs. As we discussed above, a careful assessment of the degree of appropriability and the costs of developing an entire value chain from the scratch have to be performed to make the most beneficial business decisions.
1) Venkatesh Gopal, ‘Ph.D, ‘Translating Biomedical Innovation from the lab to Marketplace’.
The regulatory paths to market for medical devices implies a series of tests, classifications and approvals which a new medical device has to clear in order for it to be permissible as an approved medical device in the market. These include ‘quality system regulations’, ‘Non significant risk study’ and review by the Institutional review board. It is important to know how to market the medical device as marketing clearance from the FDA is necessary to release the product into the market. It is important to submit the appropriate marketing application to the FDA in order to facilitate quick approval. First and foremost it is necessary to make sure that the device falls under the 201(h) of the FD&C Act. For instance if it is a radiation emitting electronic device it might come under the purview of other regulations which also have to be met with. Furthermore it is also essential to know under which FDA category the device will be classified (class 1, 2, 3 ) as it determines the marketing process that is applicable (premarket approval (PMA) or premarket notification [510(k)]) [FDA]
The IND review or Investigational new drug application review by the FDA is to ensure that the new drug does not cause any serious danger to the human subjects. Also since federal laws require that a drug has an approved marketing application before it can be transported across state borders, the IND Provides this authorization for pharmaceutical companies to ship their drugs to different states for respective regulatory and safety tests. After the animal tests are concluded showing significant positive effects, the drug manufacturing company applies to the FDA seeking permission to test the drug for its therapeutic value in human subjects. At this point the drug is classified as investigational new drug (IND). The drug company should provide manufacturing information, results from the pharmacology and toxicology studies of the new drug conducted on animals and a detailed clinical protocol for the human study. The FDA will either approve the new drug for clinical trials or reject it within 30 days of time based on its own review of the drug. Once the FDA approves the drug for clinical trial, the drug manufacturers conduct clinical trial in phases. [FDA]
The NDA review process gives the FDA enough information to study the safety of the drug and its effectiveness and the quality of production. The NDA has different classifications and the new drug is categorized accordingly as ‘new formulation’, ‘New combination’, ‘new salt’, ‘new indication’ etc. There are various stages or steps before a drug reaches the NDA review and these include 1) Discovery, Screening 2) preclinical animal trials and clinical trials in human subjects. Clinical trials are conducted in different phases. Phase 1 involves testing the drug for clinical efficacy and safety in a small group of subjects (20 to 30) while phase 2 involves testing the drug on a large group (100 to 300) and phase 3 trials require testing results from an even larger group of people. (1000 to 3000) These clinical trials help with the assessment of the side effects of the drugs. The new drug application is approved after site inspection, labeling reviews and FDA approval. Finally Phase 4 trials that are post-marketing studies are conducted to gather additional information pertaining to drug safety and optimal treatment plan. [NLM] The ANDA or the ‘abbreviated new drug application’ process is used to obtain approval for generic drugs. Generic drugs are comparable in strength, dosage, route of administration and intended use to the original or innovator drug. ANDA or generic process differs from the NDA in that it does not have to include data pertaining to preclinical and clinical trials before submission to the FDA for review. Instead the drug companies have to furnish data pertaining to the bioequivalence for the ANDA review. This is done to prevent wastage of time and money in duplicating trials for generic versions of innovator drugs.
1) FDA, ‘How to Market Your Device’, !8th Mar 2010, accessed Nov 30th 2010, available at, http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/HowtoMarketYourDevice/default.htm
2) FDA, ‘Investigational New Drug Application’, Nov 5th 2010, accessed Nov 30th 2010, available at, http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApplications/InvestigationalNewDrugINDApplication/default.htm
3) NLM, ‘Understanding Clinical Trials’, Sep 20th 2007, Accessed Nov 30th 2010, available at, http://clinicaltrials.gov/ct2/info/understand
4) FDA, ‘Abbreviated New Drug Application’, 20th Aug 2010, Accessed 1st Dec 2010, available at, http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApplications/AbbreviatedNewDrugApplicationANDAGenerics/default.htm
Health by definition includes physical, mental and social health and hence a healthy mental state is essential for the general well being of a person. Mental health and physical health are interrelated as it could be evinced from the fact that mental stress is responsible for over 75 to 80% of all bodily ailments. [Brian Seaward, 7] Having a personal definition of mental health is useful as it enables a person to have a self-evaluation for typical mental stressors. Identifying these stressors at an early stage could be very useful to prevent the onset of any serious mental illnesses such as depression, anxiety, phobia etc. Being knowledgeable about our mental health and knowing how to de-stress ourselves in this fast moving world helps us to maintain the balance that is required between our work and life. This way we could avoid the environmental stressors from eating into the vitals of our life.
I learnt about the mental health aspect when I first attended the summer retreat program, which included yoga as a therapy. Attending the classes made me think more about the stressful nature of our modern lifestyles and how most of the worries that we are occupied with for most part of our lives are largely mentally imagined fears. In particular, the concept of stress and its debilitating effects on the body such as anger, nervousness, depression and the resulting physiological effects got deeply ingrained in my mind. I have personally experienced that a calm mind is like a fortress of strength that can handle all the vicissitudes of life. My other experience is from my uncle who happens to be one of the calm and resilient people I have personally come across. I experience a feeling of calmness when he is around. When I thought about the reason for this feeling I could understand that he was almost never anxious or atleast he never reacted that way.
Mental health and well-being of a person are closely related. This is attested by the growing number of diseases and disorders that physicians ascribe to a stress filled life. From cardiac complications to gastritis and ulcer, from migraine to back pain and depression, stress is responsible for the development of all the undesirable health complications in our life. Paradoxically though, not many people realize stress as the underlying problem that triggers the physical health issues. Consequently, there is no attempt made to reduce the stress in our lives. The first step towards a healthy life therefore begins by a self-appraisal of the various stressors and how to take control of our lives. Once we understand this basic principle it becomes easy to transform our lives. There are many different ways to manage ourselves better and this could be by exercises, spiritual discipline, participation in stress management groups, etc.
To be more specific, stress is not a disease to be cured but it is the mental approach to life that needs to change. As Dr. Hans Seyle who originally introduced the term stress, said, “I cannot and should not be cured of my stress, but merely taught to enjoy it.” [Brian Seaward, 10] So what is really required is a change in our approach to life. For instance, most people are threatened by change and change is a great stressor. However, if we have a shift in perception and try to view every change as a new opportunity then we are actually going with the flow rather than fighting against it.
1) Brian Luke Seaward PhD, ‘Managing Stress: Principle and Strategies for Health and Well Being’,
The dual motive theory represents a new theory of economics introduced by Gerald A Cory that explains the constant struggle between the self-preserving neural circuits and mammalian neural circuits. Based on the Conflict systems neurobehavioral model (CSN), the dual motive theory offers a better interpretation of the human behavior. It is important to know Dr. Gerald’s dual motive theory because it offers a new model of explanation to economic behavior and management thinking and connects these fundamental motives to the neurophysiological developmental characteristics in humans. Thus by understanding the dual motive theory we can have an appreciation of human behavior that has a strong evolutionary basis.
The CSN model indicates that in humans the neural circuitry for self-preserving and ‘affectional programs’ are interconnected and the main motivational circuits referred as ‘Ego’ and ’empathy’ are identified in the frontal neocortex region. Controlled by neuronal mechanisms (neural transmitters, hormones) these two core motivational factors define human behavior. Some neurophysiologists therefore believe that human behavior is conditioned well before birth by these two ‘dynamic modular programs sets’. [Albert Somit, pg 166] Together these two contentious thought processes have helped the human survival and evolution and have contributed to the widest possible behavioral responses to various environmental stimuli. The behavior of a person at any one point of time may then be attributed to the domination or expression of either of these behavioral programs. For instance anger, frustration may result when self-preservation is activated but is met with environmental resistance. Behavioral stress is the result when both these mutually exclusive urges are activated. “Behavioral stress tells us that we are exceeding safe limits for ourselves and others, and for our large social, economic and political structures” [Albert Somit, 166]
The three major ranges illustrated in the CSN model serve to highlight this conflict. The first or the ‘egoistic range’ refers to the self-preserving tendencies or self-preservation programming. It is simply the fact that the egoistic range represents behavior that is assertive and dominated by self-interests. Under this circumstance one’s own needs acquire higher priority over others. When empathy is introduced the egoistic behavior reduces and a dynamic balance is achieved. Similarly, the Empathetic range represents human behavior that is more conditioned by domination of feelings of empathy over self-interests. The virtue of self-sacrifice is at the extreme end of the empathetic range wherein the individual values the interests of others more than his own personal needs and interests. As ego gradually increases empathetic behavior will shift towards a dynamic balance. The third range is the “dynamic balance range” and it reflects a balance between ego and empathy. [[Albert Somit, 168 ] This also is the state with the least behavioral tension. The state of perfect balance is characterized by respect for self and for others. Dual motive theory by offering an excellent explanation for the behavioral motivations of humans provides us with a better understanding of the human motives. This knowledge could be extended to other domains. For instance an understanding the dynamic balance of ego and empathy aspects of our behavior could be extended to other areas such as management and economics.
1) Albert Somit & Steven Peterson, ‘Human Nature and Public Policy: An evolutionary approach,” Palgrave Macmillan, 2003
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