Life sciences companies with ‘very effective’ innovation programs typically produce twice as many new products, the survey finds
RESEARCH TRIANGLE PARK, N.C. & NEW YORK - Wednesday, July 13th 2011 [ME NewsWire]
(BUSINESS WIRE)-- A new Economist Intelligence Unit survey sponsored by Quintiles highlights the urgent need for biopharmaceutical industry innovation. The survey comes as the biopharma sector reaches the patent cliff – this year and next, seven of the world’s 15 top-selling drugs, accounting for nearly $50 billion in sales in 2009, will go off-patent.
To investigate corporate strategies in this challenging environment, the Economist Intelligence Unit conducted a global survey of 282 senior executives in the life sciences industry.* The findings show that innovation is key to bringing new, more effective products to market to treat diseases.
“Our research shows that no single model will work for all companies, but that top innovators, which are open to insight from many different sources, generated almost twice as many products and NMEs as other companies in the last three years,” said Katherine Dorr Abreu, Managing Editor at the Economist Intelligence Unit.
Disturbingly, however, the survey also indicated that executives were ambivalent about the quality of their existing innovation programs – less than half said their R&D model was capable of meeting their company’s needs; and only about half said that changing their innovation processes was a leading priority.
“The findings of this intriguing survey highlight the urgent need for data-driven innovation as companies work to navigate the challenges of the New Health,” said Paula Brown Stafford, President of Quintiles Clinical Development. “The best innovations will come from firms who look creatively at new technologies to turn their data and information into insight, pursue open partnerships to gain additional expertise, and make better decisions, faster.”
Titled The innovation imperative in biopharma, the report indicated that:
Executives are ambivalent about the quality of their existing innovation programs: Only 47 percent of executives said their company’s R&D model was capable of meeting their company’s needs; 49 percent rated their company’s overall innovation strategy as just moderately effective at best.
Only about half are making change to innovation processes a leading priority:Although almost every company is trying something to improve innovation, only 54 percent overall – including those who admit to having poor or ineffective innovation strategies – consider it a leading priority.
Culture is the primary barrier to improved innovation among the most laggard firms: Leading impediments to innovation cited by respondents are costs (especially for smaller companies), R&D timescales and regulation. Among those companies with the worst innovation record, cultural attachment to existing practices is cited as their leading problem.
Leading life sciences innovators create the right culture, are more engaged in open innovation and make better use of data. The one in five companies surveyed who call their innovation programs “very effective” typically produce about twice as many new products as others. They also act differently in several ways. One is that they work hard to create the right environment, finding appropriate ways to reward efforts without penalizing failure. A second is that they are more engaged in open innovation, with a more flexible perspective on intellectual property (IP): 63 percent of leading innovators say that they are successfully using open innovation, nearly twice the overall average. A third is that they make greater use of data, both internally and externally, to support their efforts (67 percent).
Conclusion: The industry can do better
For companies in the life sciences industry, improving innovation is essential. But high costs, complex regulations and long development time scales conspire to make this difficult. For those ready to improve, though, the habits of the most successful innovators provide important lessons:
Rethink your innovation environment: Finding the right culture to motivate people is crucial. Companies need to be sure that working conditions and reward structures truly encourage individuals to take the risks and put in the effort to innovate.
Pursue more open partnerships: Leading companies are shifting toward more open innovation. Although intellectual property will always remain important, an excessive focus on this can hurt a company by impeding helpful innovation.
Exploit your IP fully: Too many companies lack the processes to derive full benefit from their own research. Return on investment can be improved by making greater use of discoveries that need not be restricted to the life sciences.
Explore opportunities to make better use of your data: The data tools available to assist R&D are improving rapidly. In such a situation, it takes focused effort to review and reshape processes to integrate the new technology most effectively.
To meet the challenges mounting on every side, life sciences companies need to do far more than cut costs: they must reinvent how they innovate, concludes the survey.
*About the survey
A total of 282 senior executives from the life sciences industry participated in the April 2011 survey, including respondents from pharmaceutical companies (39 percent), biotech (21 percent), medical device manufacturers (22 percent) and service providers (14 percent), among others. Survey respondents are quite senior, with 58 percent representing the C-suite or above. Geographically, 32 percent are based in the Asia-Pacific region, 31 percent in North America and 26 percent in Western Europe, with the balance from the rest of the world. Respondents came from firms of all sizes: 43 percent represented companies with more than U.S. $1 billion in annual revenue; 24 percent work for companies with more than U.S. $5 billion. To complement the survey findings, eight in-depth interviews were conducted with senior industry executives, along with extensive desk research.
About Quintiles
Quintiles is the only fully integrated biopharmaceutical services company offering clinical, commercial, consultingand capitalsolutions worldwide. The Quintiles network of more than 20,000 engaged professionals in 60 countries works with an unwavering commitment to patients, safety and ethics. Quintiles helps bio-pharmaceutical companies navigate risk and seize opportunities in an environment where change is constant. For more information, please visit www.quintiles.com.
About the Economist Intelligence Unit
The Economist Intelligence Unit is the foremost research and analysis resource in the world. Founded in 1946 as an in-house research unit for The Economist, the EIU now delivers trusted business intelligence and advice to over 1.5 million decision-makers from the world’s leading companies, financial institutions, governments and universities.
Contacts
Quintiles
Media Relations
Mari Mansfield
919-998-2639
mari.mansfield@quintiles.com
Investor Relations
Greg Connors
919-998-2000
invest@quintiles.com
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