During the first 120 years or so of the pharmaceutical industry, drug development was performed in-house, with a focus on protecting proprietary knowledge from competitors. However, independent innovation became challenging as the complexity of candidate molecules and disease targets increased. Over the last 30 years, a wide variety of collaboration and partnerships strategies have evolved to expand basic knowledge of human biology and disease pathways; invent new technologies that facilitate drug discovery, development, and manufacturing; and identify novel molecules and modalities addressing a broader range of rare and widespread diseases leveraging new mechanisms of action.
Historical Focus on IP Protection
The birth of the pharmaceutical industry took place in Germany during the mid-19th century, with the United States becoming a major player only in the early 20th century. As the industry matured, competition became fierce, and companies took great measures to protect their research activities and proprietary product data. Both basic and applied research and development activities were all performed in-house in a closed and controlled innovation model.1,2 Unfortunately, this approach eventually led to declining R&D productivity.
30 Years Ago: Basic Industry–Academic Research Collaborations
By the 1980s/1990s, large pharmaceutical companies operated global R&D organizations with research centers in multiple locations around the world but with most sales taking place in mature markets.3 The focus was on development of blockbuster drugs targeting widespread diseases. To address the decline in R&D productivity, many mergers and acquisitions took place, further expanding global R&D operations with the goal of increasing the success rate for drug development.
At this time, some big pharma companies also began to recognize the value of collaborating with universities and research institutions on basic research products. Through these partnerships, it is possible to access the deep expertise of academic scientists without the need to share product-related information.4 Even more benefits can be realized when collaborating with universities that act incubator sites for startups.
This period also witnessed the emergence of the biopharma sector, within which innovation was largely driven by smaller biotech firms often spun out of academic groups. Not surprisingly, Big Pharma companies also began seeking partnerships with these innovators to access their novel technologies and drug candidates.
The adoption of open innovation models became a new, acceptable approach to complementing internal R&D efforts and facilitating access to technologies and knowledge that support commercialization activities.2 Indeed, as the complexity of developmental candidates increased, the number of industry–academic collaborations rose throughout the decade and on into the 2000’s.
Public–private partnerships (PPPs) involving collaborations between academic institutions and pharmaceutical companies funded by governments also appeared in the 1990s.2,5 Initially, many of these partnerships focused on the development of treatments for diseases generally neglected by pharmaceutical companies, and most involved precompetitive development activities.
20 Years Ago: More Complex Partnering Strategies
The open innovation model has predominated pharmaceutical R&D since the mid-2000s, but has expanded significantly since the first industry–academia collaborations pursed in the 1990s. Increasing pressure to reduce the time and cost of development became an important driver.4 During the period 2005–2015, the pharma industry experienced significant changes. The focus shifted from development of blockbusters to treatments for rare diseases, the biologic sector grew in importance, and growth in emerging markets became increasingly important.3
Companies divested non-core assets, trimmed their R&D activities, and made them more targeted on certain disease areas.3 Mergers and acquisitions (M&A) activity was more strategic and aimed to expand capabilities rather than solely increase mass. In addition, research hubs, particularly for biopharma development, emerged in cities with large numbers of universities and advanced hospitals, thus facilitating collaborative efforts. Outsourcing to contract research (CROs) and contract manufacturing organizations (CMOs) also expanded as a means for accessing novel technologies and reducing development time and cost.
Both international pharma companies and small, emerging firms expressed growing interest in partnerships during this period. Smaller firms sought to access funding at earlier stages, as well as the technical, clinical, and regulatory expertise of Big Pharma partners.6 Pharma companies, meanwhile, began including not only startups and academic scientists but also payers, government agencies, patient advocacy groups, charities, medical device developers, and even non-governmental organizations, in multilateral PPPs.5,7 Other open innovation strategies introduced during this period included various types of strategic alliances and in-licensing approaches.8
In general, these collaborations were more horizontal in nature, most being pre-competitive, but product-development PPPs were also being formed.8 According to one report, the number of multilateral PPPs launched per year increased from eight during 2001–2003 to 54 during 2011–2013, with the majority being pre-competitive collaborations. Product-development PPPs typically focused on indications for which pharmaceutical companies paid little attention, such as tropical diseases.9
Aside from pressure to accelerate R&D and improve on the success rate for commercialization of drug candidates, pharma companies began facing a new challenge — effective use of the much larger quantities of data being generated as the result of major advances in technology. Companies began to realize that ownership of data was not the key to achieving completeness but the ability to convert that data into useful knowledge and information enabling new drug development.7 Consequently, collaborations tended to focus on discovery and early-stage development, with late-stage activities retained in-house.8
The Last Decade: Truly Diverse Partners and Collaboration Structures
In the decade from 2015 to 2025, pharma partnerships and collaborations have continued to evolve, including not only various types of multistakeholder PPPs, but many types of consortia focused on drug development and industry trade groups working to establish harmonized standards, among others. There has also been a continued shift toward more long-term strategic partnerships between larger pharma companies and various organizations, including both academic groups and startup pharma/biotech firms.10 The newest relationships often leverage advanced digital technologies, including artificial intelligence (AI), machine learning, and cloud computing.
This evolution continues to take place in response to the fact that although R&D investment has increased, the number of newly approved drugs each year has remained fairly constant — a concept referred to as “Eroom’s Law.”1 Drug developers are, in fact, outsourcing or partnering on a much wider array of research activities, from fundamental discovery work to late-stage development, including genetic engineering, target validation, analytical method development, lead selection, safety and stability assessment, process optimization, and clinical trials.
One study found that by the mid-2010s, nearly three quarters of pharmaceutical companies were taking steps to adjust their R&D strategies through M&A, restructuring into smaller, innovation-focused units, increasing use of virtual R&D and outsourcing, accessing more candidates from external sources, making venture capital investments, and expanding collaborations and partnerships.11
Another contributor to the increased level of collaboration occurring today is the COVID-19 pandemic, the response to which involved unprecedented collaboration to enable rapid development of effective treatments and vaccines.12 These collaborations involved a wide range of participants, often including direct competitors, with each selected solely based on their ability to help accelerate R&D activities. The success of these collaborations led to greater understanding of the importance of sharing knowledge and technologies and increased adoption of open innovation R&D models.2
One important trend is the growing importance of crowd sourcing and open-source partnerships focused on pharma R&D.1 Innovation centers based on the open-source philosophy facilitate transparency and sharing of ideas to achieve more efficient problem-solving.11 Crowdsourcing approaches, such as Innocentive®, YourEncore, and Grants4Targets, supporting target identification, preclinical and clinical development, clinical operations, manufacturing, regulatory affairs, organizational effectiveness, safety, pharmacovigilance, and quality management, became entrenched as well.11
Interest in consortia involving two or more organizations pooling resources to perform research collaboratively also increased during the last decade. Approximately 140 identified in 2020 to be focused on basic, applied, or clinical research, were working to generate information and knowledge with value for all members and benefit from accelerated development, risk-sharing/reduction, improved quality and efficiency, establishment and implementation of technical standards, and investigation of new modalities/mechanisms of action.13 Topics of focus varied and included specific products/markets, specific technologies, specific diseases, and industry-wide issues.
The Next Decade: Taking Partnering Further
Over the coming 10 years, even more reliance on open innovation strategies can be expected in the pharmaceutical industry. There is even greater pressure today to reduce development timelines and costs and bring to market truly differentiated candidates that offer advantages over existing therapies in terms of efficacy, safety, or convenience. Collaborations, whether straight partnerships, multi-stakeholder PPPs, consortia, innovation centers, or formed through crowd sharing applications, provide biopharma developers with access to new perspectives, expertise, and technologies that are needed to comprehend and synthesize the growing knowledge base on human biology and disease mechanisms, identify novel drug candidates, and develop efficient manufacturing solutions for these increasingly complex molecules.3
Under current conditions, a “siloed approach” to drug development and commercialization is no longer effective.14 A more agile R&D strategy is needed in the face “the complexities of modern healthcare…, the rapid pace of technological advancements and generative AI.”14
Basic approaches, such as joint ventures, M&A, outsourcing, and simple partnerships, are also insufficient. More advanced collaboration models are needed, including “prediscovery consortia where open-source strategies prevail; R&D networks spanning disciplines and geographies; centers of excellence focused on key areas of technological and human capital development; public–private partnerships involving new and unexpected stakeholders; crowd-sourcing where shared, public innovation dominates; and web-based collaboration platforms that virtually link stakeholders.”15
These new ways of pursuing drug discovery and development are being further facilitated by the use of cloud-based platforms, virtual meeting spaces, and project management software, all of which enable “real-time information sharing, seamless communication, and remote collaboration across geographical boundaries” both internally amongst pharma company cross-functional teams and with external partners of all types.14
References
1. Iazzolino, G, R Bozzo. “Partnership Models for R &D in the Pharmaceutical Industry”. In: Canci, J.K., Mekler, P., Mu, G. (eds) Quantitative Models in Life Science Business. SpringerBriefs in Economics. Springer, Cham. (2023).
2. Conicella, Fabrizio, Federica Destro, Aurelija Galvelyte. “Collaboration with Startups in Pharmaceutical industry: emerging Open Innovation models. The ISPIM Innovation Conference – Innovating Our Common Future.” Berlin, Germany. 20–23 Jun. 2021. Event Proceedings: LUT Scientific and Expertise Publications: ISBN 978-952-335-467-8
3. Gautam, Ajay and Xiaogang Pan. “The changing model of big pharma: impact of key trends.” Drug Discovery Today. 21; 379-384 (2016).
4. Ma, Zhongxuan, Kevin Augustijn, Iwan J.P. de Esch, and Bart Bossink. “Collaborative university–industry R&D practices supporting the pharmaceutical innovation process: Insights from a bibliometric review.” Drug Discovery Today. 27: 2333-2341 (2022).
5. de Vrueh, Remco LA, Jon SB de Vlieger, and JA Daan. “Editorial: Public-Private Partnerships as Drivers of Innovation in Healthcare.” Front. Med. 30 May 2019 Sec. Regulatory Science, Volume 6.
6. Ducrey, Bertrand. “The Importance of Collaborative Business Models for Drug Development.” Pharmaceutical Executive. 27 Apr. 2021.
7. “Radical Collaboration: Pharma’s New Players.” PharmaVoice. 26 Apr. 2013.
8. de Vrueh, Remco LA and Daan JA. “Crommelin Reflections on the Future of Pharmaceutical Public-Private Partnerships: From Input to Impact.” Pharm. Res. 34:1985–1999 (2017).
9. Croft, Simon L. “Public-private partnership: from there to here.” Transactions of the Royal Society of Tropical Medicine and Hygiene. 99: 9-14 (2005).
10. Lewis, David. “The evolution of industry-academia relationships in pharma.” European Pharmaceutical Manufacturer. 27 Jan. 2020.
11. Schuhmacher, A, O Gassmann, and M Hinder. “Changing R&D models in research-based pharmaceutical companies.” J. Transl. Med. 14: 105 (2016).
12. Dunbar, Eric D, and Chad A. Landmon. “IP and Collaboration.” Pharmaceutical Executive. 41 (2021).
13. Olk, Paul and Joel West. “The relationship of industry structure to open innovation: cooperative value creation in pharmaceutical consortia.” R&D Management. 50: 1 (2020).
14. Walker, Jim. “Breaking Down Silos: New Models for Pharma Collaboration.” PharmaLeaders. 13 Jun. 2024.
15. Allarakhia, M. “Evolving models of collaborative drug discovery: managing intellectual capital assets.” Expert Opinion on Drug Discovery. 13: 473–476 (2018).