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Vol 18, No. 08, August 2014   |   Issue PDF view/purchase
Public-Private Partnerships in the Pharmaceutical Industry
Dr Alex Matter
CEO, Experimental Therapeutics Centre (ETC)


Glivec (or Gleevec in the US) is an anti-leukemic drug that is known by several monikers — a miracle drug, a magic bullet, a blockbuster — and is a fine example of targeted therapy against certain leukemias and solid cancers. A lesser known fact is that it is also the product of successful partnerships that spanned 18 years among public and private organizations, including the Dana-Farber Cancer Institute (Boston, US), the Friedrich-Miescher Institute (Basel, Switzerland), the Oregon Health Sciences University (Portland, US), Ciba-Geigy (now Novartis in Basel, Switzerland), the National Cancer Institute (US), the National Institutes of Health (US) and the US Food and Drug Administration. The development of Glivec demonstrates the iterative cycles of innovation between academic, clinical and industry scientists who are involved across the entire drug discovery and development process. Furthermore, it is possibly one of the first examples of truly synergistic partnership among academics, clinicians, patients, regulators and industry –— an instance of a successful, multi-faceted, commercially-driven, public-private partnership (PPP) in the pharmaceutical industry.

Socially-driven Public-Private Partnerships in R&D

By definition PPPs are partnerships between public sector entities and private sector companies set up to harness the partners’ complementary expertise and resources to accomplish a specific mission. For the pharmaceutical industry, PPPs between the public sector and private companies began to take off in the 1990s. The early PPPs often focused on the development of pharmaceutical products targeting diseases that were prevalent in the developing world but were neglected by pharmaceutical companies due to the lack of commercial potential. These PPPs were socially-driven and arose because both private and public sector stakeholders recognized the urgency and the need to tackle the global burden of neglected diseases.

A good example of an early PPP success story is the development of the world's first registered Artemisinin-based Combination Therapy (ACT). ACT cures over 96% of cases of malaria caused by P. falciparum and was put on the World Health Organisation's (WHO) list of essential medicines in 2002. This success story began with the discoveries by a group of Chinese inventors, led by Prof. Zhou Yiqing and a small project team at Ciba-Geigy (which later became Novartis after its merger with Sandoz in 1996). This partnership between a Chinese research group and a team from a Western pharmaceutical company was the first of its kind in China at that time. In 1999, the Medicines for Malaria Venture (MMV) was set up as a platform to bundle know-how and resources to help address the glaring problem of tropical diseases, in particular, malaria. Academic groups as well as small and large companies, including GlaxoSmithKline, Sanofi and AstraZeneca also participated in this effort. The initiative received a major funding boost when the Bill & Melinda Gates Foundation (BMGF) made a US$25m donation (over 5 years) in 2000. Most importantly, the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM), which was established in 2002, was able to shoulder the heavy burden associated with the manufacturing of the medicines. Today, a whole range of ACTs, including pediatric formulations, is readily available on the market and at low prices.

Socially-driven PPPs have contributed to the emergence of new R&D funding approaches and drug discovery and development paradigms. The partnerships have evolved and they now range from small, product specific collaborations between a research institute and a company to large scale programs hosted by international governmental organizations (e.g. WHO) or run by private non-profit organizations. Various platforms have been established to manage the complexity and coordinate the implementation of these efforts. Prime examples include the MMV which focuses primarily on malaria, the Drugs for Neglected Disease initiative (DNDi), which deals with a whole panel of tropical diseases, and the Global Alliance for TB Drug Development (TB Alliance) which focuses exclusively on tuberculosis.

Today, participants from the government sector, private foundations, NGOs and companies can come together to form funding consortia. Similarly, consortia of researchers can comprise of academic institutions, government agencies, hospitals and industrial partners. The various participants gather and bring relevant resources to bear at specific stages of the drug discovery and development process. The following diagram and table show the approaches to fund R&D in the absence of commercial incentives, as well as examples of organizations that are involved and their roles.

Clearly the PPP approach has been shown to work — it has been able to deliver new drugs and drug candidates for the treatment of neglected diseases. The pipeline of new drugs and drug candidates remains quite strong. For instance, most recently, a partnership that involves the Singapore government, the Wellcome Trust, the Novartis Institute for Tropical Diseases, collaborating with the Singapore Immunology Network (SIgN, A*STAR) and the MMV as well as a number of research institutions around the world, has delivered a new class of anti-malarials, with a lead compound (KAE609) currently in Phase II clinical trials. As these and other examples show, socially-driven PPPs continue to be an important source of drug innovation in the absence of commercial incentives

Commercially-oriented Public-Private Partnerships in R&D

The development of new drugs has historically been an expensive and risky affair. It has become even riskier due to the relentless pressures from health authorities, healthcare payers, insurance companies and governments seeking to obtain cheaper and safer drugs. This has led to the consolidation of the whole industry, the disappearance of many well-established pharmaceutical companies and the development of new business models to cope with these huge pressures. The pharmaceutical sector has adopted various strategies which have allowed companies to stabilize R&D costs and to continue to bring highly innovative medicines to the market despite the high regulatory barriers. Besides the classical mergers and acquisitions, pharmaceutical companies have implemented a number of strategies including those shown below with some success:

  1. Creating smaller drug discovery units around therapeutic areas or even single projects
  2. Outsourcing of expensive activities to low cost countries
  3. Outsourcing clinical R&D to specialized Contract Research Organizations (CROs)
  4. Outsourcing drug discovery and development to small biotech firms and academia
  5. In licensing of IP, drug targets, technologies and drug candidates from small biotech firms and academia
In short, after the rounds of industry consolidations, pharmaceutical companies have adopted a panel of different strategies to streamline their R&D processes in order to raise efficiency and productivity. Among the many options, entering into PPPs with competitive and commercially-oriented public research organizations to undertake early stage drug discovery work can be an effective strategy.

A commercially-oriented PPP involves a publicly-funded research organization (e.g. university or research institute) and a private pharmaceutical or biotech company, to develop new drugs that can be sold by the company for a profit. For example, the Experimental Therapeutics Centre (ETC), a research institute under Singapore's Agency for Science, Technology and Research (A*STAR), has several ongoing research partnerships with private pharmaceutical companies. These aim to translate leading edge science into drug candidates, ready for clinical trials, and eventually into marketable pharmaceutical products. Although it can take years and sometimes decades for such PPPs to deliver their returns, public and private sector partners have slowly come to appreciate the potential commercial, economic and social benefits that PPPs bring.

Working with a research partner that is able to bring its own resources and expertise to an R&D project allows the company to lower the risks of the project and achieve cost saving. The company may be able to access unique technologies, tap into public research networks and leverage upon relevant outside expertise that may increase the project's chance of success. Furthermore, through PPPs, companies can potentially mobilize new funding streams.

Successful PPPs can benefit the pharmaceutical industry as well as the larger society. Government support for PPP research can help to drive R&D activities, build up important capabilities creating employment for highly trained individuals and foster the expansion of an industry sector that can promote the country's long term economic growth. The output of the PPPs if successfully commercialized, will ultimately result in drugs and medical technologies that bring about greater patient benefits and better healthcare.

To form successful PPPs with the industry, flexibility on the part of governments and public research institutes is important. They must also be able to understand the needs of the industry and the market situation, and be nimble enough to respond quickly to these requirements. For these partnerships to become successful, partners from both sides should:

  • Possess unique assets, expertise, capabilities, technologies;
  • Share common interests, goals and the belief that all partners stand to benefit;
  • Commit to transparency and accountabi lity;
  • Have realistic and reasonable expectations.

Public-private partnerships are playing an increasingly important role within the pharmaceutical industry as a means of enriching product pipelines and boosting R&D productivity. They are a promising approach to addressing the current challenges in pharmaceutical innovation because they bring together positive aspects of the public and private sector players. Such partnerships can help to improve R&D productivity and boost the R&D pipelines of the pharmaceutical industry. More importantly, they can make impactful contributions towards a solution to address the many challenges faced by healthcare systems around the world.






About the Author

Professor Alex Matter, M.D., is CEO of the Experimental Therapeutics Centre, A*STAR, Singapore. He spent five and a half years as Director of the Novartis Institute for Tropical Diseases (NITD), from October 2003 to February 2009. Prior to this role, Dr. Matter was Global Head of Oncology Research for Novartis Pharmaceuticals Corporation, Head of Novartis Institutes for BioMedical Research in Basel and Global Head of Translational Research.

Dr. Matter played an important role in the success of several anticancer drugs, including Gleevec/Glivec®and more recently, Tasigna®, building and leading the teams that discovered these and several other anticancer drugs as well as one HIV protease inhibitor (Reyataz®) that is marketed by another company.

Dr. Matter received his medical degree from the University of Basel. He also had fellowships at the Swiss National Science Foundation and the Swiss Academy for Medical Sciences. He has published more than 100 scientific articles and several book chapters in the area of oncology and hematology. He is emeritus Professor of the Medical Faculty of the University Basel and an Honorary Adjunct Professor of the Department of Pharmacology, Yong Loo Lin School of Medicine, National University of Singapore.

He is a member of the American Association for Cancer Research, the National Medical Research Council in Singapore, and the Board of Curiox, a Singapore-based start up company. He is also an elected member of the Swiss Academy of Medical Sciences. Dr. Matter is the recipient of the 13th Warren-Alpert prize and the AACR-Bruce F. Cain Memorial Award.

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