Why healthcare open innovation is failing for nanomedicines

Research into new drugs is funded by society in the hope that it will lead to a breakthrough in the treatment of a range of serious diseases. This is always a challenging proposition, even for industry who understand the severe restrictions of a heavily regulated sector, but in the case of non-industrial researchers it is exacerbated by a lack of knowledge of the drug development process. Often such work, divorced from the development process, is basic research which can be nevertheless important – but is unlikely to satisfy the hopes of society. Basic research, especially if paradigm changing is essential for science and industry, but knowing both the barriers and opportunities for commercialisation are important.

There are three major barriers to open innovation in the healthcare sector:-

1. A lack of knowledge of many aspects of the acceptance path for new drugs.

2. A lack of willingness to conform to the normal research to development to market decision-making process for new healthcare products.

3. Translationally inexperienced peer review by funders of healthcare projects

Overcoming these barriers would significantly challenge the status quo for many academics and SMEs. The lack of industrial know-how has been discussed and much more could be done – but the main barrier is still the predominantly basic research mind-set that the university system is designed to produce and also importantly, generally manages funding strategy and prioritises areas. The traditional and essential training role of universities would be enhanced by modules centred on translation, intellectual property, development and commercial strategy.

Society and especially funders have to decide whether they wish to fund such an inefficient applied research system; where groups do not know where the strategically and commercially important areas are. Healthcare researchers should differentiate between derivative research and radical innovation and ideally to try to achieve real breakthroughs. Universities have to seriously look at their track record in healthcare innovation by looking at their corresponding income and talking seriously to their business development offices. Income is rightly not a principle objective here, but many countries are now requiring outputs beyond academic excellence and looking to see wider impact on economies and patients.

The academic sector is notoriously hard to manage strategically, given the prerequisite of academic freedom and the significant cultural change required for innovation. Some of the cultural hurdles are given below:-

• Academics are not trained to work with others/teams or seek advice

• The culture is one of competition and secrecy

• Basic research is still seen as more important than industrial applied research

• Publication driven system

• Current department assessment metrics do not reward effective translation

• The analytical standards and reproducibility required for an industrial project are far higher than for an academic publication

• No incentive for change

• The peer review system maintains the status quo

Most healthcare research starts from a simple idea, but all ideas are not equal and most if subjected to industrial scrutiny would not be viable. A number of different factors come into play here – academic freedom to explore options – and sometimes a belief that industry would not accept a new paradigm. The latter point has some truth in that a few companies are always conservative, but not those for example who quickly exploited monoclonal antibodies.

We are therefore left with two options:-

• To fund healthcare applied research without any development or market knowledge – often leading only to publications.

• To try to introduce informed market knowledge from the outset. A major cultural change is required for this to be acceptable. Existing research impact factors do not adequately probe translatability, where a good metric for success is a group’s income from technology transfer rather than high quality publications. This must be combined with an improvement in peer review, albeit this will be unpopular.

The most important stage of drug research is ideation. If an idea is not developable it is unlikely to be stopped by the peer review process, and will continue to be funded until a technical problem occurs or it seeks industrial funding. Indeed multi-million Euro flawed projects have been funded, without any due diligence on whether the end product could be manufactured. Many Nanomedicine projects, for example, are now at this development watershed and many are struggling with problems that could have been anticipated and avoided. Some funders are providing money for market research at “proof of concept”; whilst welcome, the source of the problem goes back to the original idea and lack of due diligence round the concept. Laissez-faire has led to major markets being ignored, whilst niche and probably unprofitable ones are over resourced. It is often overlooked that the drug development process does provide exceptional challenges, which can provide a major stimulus to creativity; this is a major opportunity missed by open innovation stakeholders.

Academics and many SMEs often have little or no access to industrial knowledge or contacts to advise them. The requirements for development are not taught to relevant graduates and this lack of knowledge is transferred to spin out companies in due course. This know-how is of course in industry and unfortunately in Europe there is a lack of effective communication from this sector. Most importantly there is no incentive to generate translatable ideas. The arrival of Open Innovation has opened doors but in general the academic–industrial threshold has not been crossed. For this to happen requires more realistic expectations of commercial relationships/investment and return, more sensible strategies for IP development and transfer, more effective information sharing and longer-term and more professional information and relationship management

Funding for non-translatable projects is likely to continue and the status quo will be maintained, unless the peer review process is adapted for translation by using a panel with hands-on experience of developing drugs or healthcare products (not technical skills). Whilst an experienced panel can never be perfect in anticipating the future, it is surely better than an inexperienced panel.