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Protecting U.S. Global Dominance in Biomedical Products

Mark Marich on January 28, 2010 Source: Policy Dialogue on Entrepreneurship

A new Kauffman Foundation paper, The Distributed Partnering Model for Drug Discovery and Development, argues that drug discovery is in jeopardy and recommends a new “distributed partnership model” for speeding therapeutic products to market.

In the 20th century, pharmaceutical and biotechnology companies were the major contributors to therapeutic innovations. Their 25-year-old co-partnering model, once the source of a steady stream of innovative products, now is "ineffective and anachronistic," according to co-Authors Duane Roth, chief executive officer of CONNECT®, a San Diego nonprofit that commercializes local research-based discoveries, and Pedro Cuatrecasas, a biochemist and adjunct professor for the Departments of Pharmacology and Internal Medicine at the University of California, San Diego.

The authors attribute the business model's demise to two major developments: pharmaceutical companies shifting control from research to marketing, which has stifled scientific research; and investors shying away from long-term commitments for products that often are seen as "too early" in the development phase or "too risky."

"The biotech/pharma model is failing to translate the advances of biomedical sciences to innovative products," Roth said. "But lessons from the past show we can overcome these hurdles to market."

Roth and Cuatrecasas propose a “distributed partnering model” which involves four distinct, independent spheres collaborating in a risk-shared environment to discover, define, develop and deliver innovative products. The United States, they say, is well-represented in each of those disciplines.

Unlike the existing business model, which requires legions of experienced entrepreneurs and venture capitalists, this business model would be composed of product definition companies (PDCs), specifically structured to advance innovation through the initial definition research phase.

Each PDC would consist of a team of experienced professionals who would raise funds to manage several projects simultaneously. The entities would acquire early stage discoveries from research institutions and invest in defining product applications with the ultimate goal of selling the successful endeavors to pharmaceutical companies for further development and delivery.

"The model focuses on advancing products as opposed to companies," said Frank Douglas, a senior fellow at the Kauffman Foundation. "We need thousands of new products, not thousands of new companies."

Category:  Technology Transfer 

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