Can Big Pharma survive without outsourcing?

When one company takes the initiative and does something which its competitors are not doing is one thing. But when all the companies in the same sector are pursuing the same (new) strategy, then it is a clear sign that a sectoral shift is occuring.

Take Big Pharma and academic collaborations; few days ago, we covered the story of how both Glaxo and Pfizer are focussing on outsourcing product development to both young biotech companies andacademic departments of various universities. Today came the news that AstraZeneca, one of the largest pharma companies in the world (marketing capitalisation of more than $35bn) is doing the same: more academic collaboration.

What is peculiar about AstraZeneca is how they are doing it; the latest structure which they put in place to promote academic collaboration is certainly innovative: basically, they are making available to UK academics 22 new (and previously secret) compounds, which were developed in-house but which, for whatever reason, were not going anywhere (i.e. low opportunity cost and high sunk costs). On the other hand, the Medical Research Council (MRC), a UK publicly-funded organisation dedicated to improving human health, is making available to the academic researchers a total of £7m to study those compounds. So two parties (AstraZeneca and the academics) contribute in-kind while the MRC contributes cash to the deal. If anything is discovered then the profits are shared between all three parties: AstraZeneca, the academics and the Medical

Research Council.

Clever, eh? If only we could implement more collaboration frameworks like this one between academia and industry! The world may be a better place.


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