1. Why single innovative idea will never be cost-effective

Why single innovative idea will never be cost-effective

A single innovative idea leading to a product or solution by itself will never be cost-effective unless it is followed by a series of follow on innovations

Published: June 8, 2017 6:27 AM
Targeting cure for a disease in terms of unmet needs resulted in newer therapies through path breaking innovations. (Reuters)

Bhujanga Rao

Innovation has always been the key driving factor running the pharma industry globally, be it the ‘Discovery Research’-driven super pharma segment or the product-driven generic pharma sector. Targeting cure for a disease in terms of unmet needs resulted in newer therapies through path breaking innovations. These innovations are of a radical and fundamental kind, where intense integrated studies in life sciences lead to the basic understanding of the disorder as a chain of events. A single ‘innovative’ idea leading to a product or solution by itself will never be cost-effective unless it is followed by a series of ‘follow on innovations’. This is true of any scientific field as illustrated by the pioneering work of the great inventors like Thomas Edison. The first electrical/mechanical gadget was never a cost-effective model but was always seen as a proof-of-concept device. The inventors of yester years knew this and quickly built upon and upgraded their own inventions to bring forth a commercial commodity in the market place expeditiously. Drawing a parallel analogy, the health care products also followed the same routing. The first product conceived by a big pharma company tends to be less than perfect, and subsequent optimisations through a series of sequential innovations have always helped companies to launch the product in a cost effective way. Anti-cancer drugs have emerged out from a high caliber innovation called “rational drug design”, process of finding new medications, based on the knowledge of a biological target. These aspects illustrate how ‘basic innovations’ in the drug discovery arena can tilt the tables in favour of the patient, when the unmet needs are really met.

The ‘generic pharma’ represents the other side of the coin, where innovation of a different kind—technology or process innovation—takes the steering and delivers pharmaceutically equivalent products to the patients through a consumer-centric cost-effective approach. The technology and process oriented innovation cycle at the generic pharma led to optimised methods of manufacture, waste stream minimisation, better drug delivery systems, multi-climate compatible end-product formulations and packaging-covering comprehensive global launches. Who said that ‘innovation’, is confined to the laboratory modules of R&D? Generic pharma, especially Indian pharma, has been following the ‘adaptive process technology’ improvements on the manufacturing floor contributing remarkably to time-cycle reduction, batch-size enhancement, production-cycle optimisation, effluent minimisation, etc. The end-product quality control emerges out of innovative analytical technologies. The whole gamut of innovation models defined above together form a cluster of ‘disruptive innovation matrix’(DIM), which the generic pharma has pioneered and captained very well for many decades.

‘Innovation’, when captured as a tangible measure in terms of revenue generated, earned or served, gets translated to ‘intellectual property’ (IP) or ‘intellectual wealth’ (IW). In the knowledge- and technology-based sectors like pharmaceuticals, it has to be sustained and all efforts need to be put in to make it a culture across all enterprises—small, medium and large.

Within the framework of research and development in a pharmaceutical forum, various sub groups like the process team, the analytical team, the biotech team, the formulation development team, etc are usually compartmentalised. However, close integration and cohesive synergistic working only can ensure product deliveries with seamlessly fused technologies. Each sub-division or team in the organisational frame can contribute to the total IP wealth and the corporate heads can employ this as an assessment indicator effectively.

Another important aspect to note is the concept of ‘cross-fertilised IP’, where innovative solutions culminate through collaborations and partnerships. The observation is that cross-cultured and hybrid thinking across organisations and institutions normally lead to better solutions, matching the
contemporary expectations.

Writer is President of R&D and technical, Natco Pharma Limited

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