Innovation in the Pharmaceutical Industry: The Process of Drug Discovery and Development - Innovation and Marketing in the Pharmaceutical Industry - page 48

If biotech companies need assistance with the organization of clinical trials, they
have the option of outsourcing to independent Contract Research Organizations
(CRO). Yet, many biotech fi rms may decide to license their products to large phar-
maceutical fi rms despite the CRO option because of the greater marketing knowl-
edge and experience large pharmaceutical fi rms can also bring in. For the originating
biotech fi rms, the downsides of relinquishing market control can be more than offset
by the infusion of vast amounts of capital and the massive advertising and sales
effort large companies can deploy before and during the market launch.

2.3.2.3 Public Sector Research Institutions as Centers

for the Creation of Open Science

The extraordinarily science-intensive process of innovation in the pharmaceutical
industry is critically dependent on state-of-the-art technologies. The prediscovery
phase of drug innovation starts with basic research, fundamental knowledge, and
understanding of the mechanisms of pathology. By nature, such broadly applicable
research is germane to the mission and the interests of research institutions operat-
ing in the public sector. The most active institutions in this regard are universities,
hospitals, and government labs.
In the USA, public sector institutions, funded mostly by NIH, are an essential
contributor to drug innovation. Their involvement comprises knowledge accumula-
tion through fundamental research, participation in clinical studies, and training of
future healthcare professionals. Public funding for fundamental science is predi-
cated on its expected value: basic research creates fundamental knowledge, whose
future applications and commercial potential might be presently unclear.
Unlike their counterparts in the for-profi t sector, most public sector institutions
are not inordinately governed by commercial considerations. For them, the scien-
tifi c curiosity, the broader societal interests, the recognition by a community of
peers, the wide range of implications, or the gratifi cation of doing novel research
can be among the most compelling drivers. Self-guided, replication-focused, regu-
lated by publication measures and often sanctioned by a peer review system, the
science created by public sector institutions generates the data, ideas, tools, and
paradigms that push the scientifi c and technological frontiers in the pharmaceutical
industry and chart its future trajectories. The expectation is that many of the
advances in fundamental science are going to be utilized by applied researchers
working on specifi c projects at for-profi t fi rms. It is their job to eventually convert
the fundamental knowledge generated by public institutions into specifi c, market-
able drugs.
Because of the more general nature of fundamental science created in public
research institutions (e.g., understanding metabolic processes and biological mech-
anisms), its ultimate benefi ts are contingent upon the open dissemination of results
(e.g., through publications or presentations) to downstream fi rms and the industry at
large. Fundamental scientifi c advances generated by public sector institutions are
likely to be relevant to a broad range of fi elds. Open access to the latest basic