What’s the Problem with Drug R&D?

Bellagio, Italy, July 15-18, 2014#opensourcepharma

What is the problem?

• Too little innovation

• Too much mediocre innovation

• Unaffordable innovation

• Rests on non-predictive science Erratic Driven by black swans High-risk High prices No Moore’s Law… only Eroom’s Law!

InnoThink

Driven by unattractive “attractors”

High risk

High return

High R&Dinvestment

Industry concentration Industry fragmentation

Low risk

Low return

Low R&Dinvestment

InnoThink

What else?

• Inadequate leadership for much of past decade Changing in companies with leaders willing and able to deal with

the challenge (e.g., jnj, gsk, sny, nvs, roche, bmy, bay, azn)

• Underperforming research model

• ½ Big Pharma = High-priced generic industry

• Ambivalent about change

• Change difficult… outcomes uncertain… but those that do not reform, will be outperformed

InnoThink

Alternatives: How can we outperform the status quo?

InnoThink

• Open-source drug R&D (e.g., OSDD, OSM)

• Crowdsourcing (e.g., Innocentive)

• Drug repurposing (e.g., NIH, disease foundations, “biotechs”)

• Public-private partnerships (e.g., DNDi, MMV)

• Networked innovation (e.g, ANDI/WHO; J&J)

• Virtual companies (many “biotechs”; GSK)

• Forced disruption (DARPA)

• Precompetitive collaboration (Consortia-Pedia)

• Biological modeling (Sage, Dassault)

More thoughts…

InnoThink

• Let’s increase the supply of drugs… not manage the scarcity

• We are on the cusp of a hyper-innovation age… but it will involve mostly different players

• Some industries cannot be reformed… they can only be disrupted… and disruption always comes from the outside

• Innovation should be plentiful… much of the information is free… tools are widely available… craft is non longer proprietary

• Crowdfunding and microfinancing will meet a growing share of drug discovery financing needs

• IP is only a problem because there is too little of it that’s any good… scarcity drives up value

Last thoughts…

• We are witnessing 3 transformations at once The transformation of biology The transformation of research tools and methods The transformation of medicine

• All three are driven by data… that spells change

• The expertise in data analysis does not reside in pharma

• Smart phones changed the world in < 7 years… We can change pharma yet in this decade

InnoThink

8