Commonwealth in the networked society [3] Big pharma

October 11th, 2009

Big banks, big pharma, big problems, writes John Martin,

MONEY has thrown society out of kilter. Banks that once appeared to have mountains of cash have collapsed. As a consequence of the global recession, governments now recognise that banking is too important to be left to the bankers. States have taken action, from wresting control of financial institutions to introducing new regulations.

I believe the financial meltdown has implications for pharmaceutical research. The running of large pharmaceutical companies carries a social responsibility that is as heavy as running any bank. Recently, however, this unwritten contract between society and drug companies has not been fulfilled. Is our health now too important to be left to big pharma?

This is very much along the lines of the No Straight Lines ethos, and touches on the Commonwealth Series that a networked and opens source approach could deliver for society and commerce and enterprise. Martin continues,

To illustrate my concerns, let’s look at the treatment of heart disease. Many important cardiovascular drugs have been invented: statins, ACE inhibitors, beta blockers, fibrinolytics. But in the last 10 years, few of significance have emerged, even though the pharmaceutical industry has spent unprecedented amounts of money on research and development: in each year of that decade, Pfizer spent about $6 billion, Eli Lilly $3bn, and GlaxoSmithKline $2.5bn.

This splurge is reminiscent of how banks misused their funds before their collapse, but the industry has been insulated from the recent economic changes and has accumulated vast cash piles from the sales of medicines (in the UK, mostly through sales to the National Health Service). On average, each top-20 pharmaceutical company has access to about $7.5bn in cash.

Could the cash piles of big pharma be mobilised in a more efficient way for the public good?

Exactamondo!!! Richard Sennett believes that Closed Knowledge Systems ultimately tend to fail. The last question Martin poses also got me thinking about Jeff Saperstein, who argues that there is a particular process by which one inspires true innovation, that can also have knock on effects for regional economic development these are:

  1. Attitude drives accomplishment
  2. Reverence for knowledge
  3. Openness to new ideas
  4. Flexibility to adapt
  5. Capacity to work with people from other cultures


  1. Education and investment in people is a clear priority for governments
  2. Major universities
  3. Regional technical colleges
  4. Research institutions

Saperstein makes this observation: a convergence of societal institutions must work together for a region to succeed.

In 2006 SMLXL came across a science based research community called SIPHS – here is the post

SIPHS , a tool that leverages an online community in a different fashion: rather than searching for online documents, users search for community members with a particular knowledge set. We established SIPHS in response to a shared frustration. The Internet was designed to put people in touch, but it is quite difficult to identify individuals that possess very specific, often highly technical knowledge.

Members of SIPHS can search for peer-generated information, ask questions of other members, and provide peer support

Members of SIPHS is currently comprised of more than 200 biology and biomedical researchers spread across 30 countries. Members of the community are tagged with their respective areas of expertise, and queries for information are submitted via an electronic message to experts in relevant fields. By enabling direct communication with knowledgeable and experienced individuals, refining searches becomes easier (as searching is no longer keyword dependent), background information is more quickly clarified, and new ideas are more rapidly spawned. In essence, this mimics the offline world in that the best source of information is often a colleague who has experience with the problem at hand. SIPHS is self-funded and, like all the tools mentioned in this discussion, free to use.

And John Martin makes the same observation

Increasing spending on R&D cannot be continued indefinitely with such meagre progress. If a collapse of the pharmaceutical industry does occur it might not be for decades, but one of the biggest lessons of the banking collapse is that no one can predict economic forces with much certainty. The fall of big pharma could be imminent.

There is another way to fund the development of new treatments. Many innovative ideas that have changed society have arisen from the combination of curiosity and academic freedom found in universities. This is where small amounts of funding can produce big results. In recent years, university research has been exploited by industry to produce new drugs, such as blood clot-busting “tissue plasminogen activator”, courtesy of the Catholic University of Leuven (KUL) in Belgium.

Now, while big pharma has so much money it doesn’t know what to do with it, universities are being starved of resources and research funding has decreased in real terms. At the same time, university research strategy is under-organised and there is ignorance of how to exploit intellectual property and utilise patents. Nevertheless, the potential of universities is enormous.

In a perfect world, scientists share problems and work together on solutions for the good of society, writes the Harvard Business Review, However, real life is not like that, key obstacles: competition for publication and intellectual property protection.

So the question is… is there a model for encouraging large-scale scientific problem solving? Yes, and it comes from an unexpected and unrelated corner of the universe: open source software development, argues Karim R. Lakhani, an assistant professor at Harvard Business School. His research leads to these conclusions

  1. Practices in the open source software community offer a model for encouraging large-scale scientific problem solving.
  2. Open up your problem to other people in a systematic way. A problem may reside in one domain of expertise and the solution may reside in another.
  3. Find innovative licensing ways or legal regimes that allow people to share knowledge without risking the overall intellectual property of the firm.

    So on one hand we have an unproductive big pharma which is cash rich, writes John Martin, ‘and on the other a cash-poor university system that has produced fistfuls of Nobel prizewinners. The way forward is obvious: inject the money into university research. Experience tells us this can have major benefits. One of the most successful initiatives in the last decade has been the spin-out of small biotech firms. Biogen sprang from the Massachusetts Institute of Technology and Genentech from the University of California, San Francisco.

    Martin argues: that one hundred new companies could be created from British universities alone over 10 years if big pharma money were blended with a proactive way of recognising patentable inventions and managing university science.

    And perhaps this is the way to do it, according to Karim R. Lakhani

    Open source collaboration is a very different model for innovation and product development than most firms are used to. I began to wonder where we might see similar patterns occur outside the software domain. In open source communities we see a vast degree of openness in which everybody can participate, but also the practice of broadcasting your work to everybody else. People continually broadcast their problems, others broadcast solutions, and the person with the problem is not always the one with the solution. Oftentimes, somebody else can make sense of both what the problem has been and what people are proposing as solutions, and can come up with a better answer.

    Harnessing collective intelligence, motivating people through commercial and reputational rewards and connecting individual knowledge up to the network means that with many eyes all bugs are shallow. By big pharma unleashing its vast cashpile and investing in the right way – it would also put the pedal to the metal in terms of rapid innovation and development. This whole approach of locked down thinking, patents and IP – gets in the way of real innovation. Its  a mindset issue, a philosophical issue, and a human issue.

    Straight Line thinking stops here.

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