Why Big Pharma is Sharing Once-Guarded Intellectual Property

research scientists

Why Big Pharma is Sharing Once-Guarded Intellectual Property

The pharmaceutical industry, notorious for its proprietary secrecy, has witnessed a recent growth of unprecedented collaborations between rival companies.  Partly motivated by shrinking budgets, companies are now sharing laboratories, scientists and research findings in order to avoid duplicating mistakes and to produce breakthrough innovations. This is a move towards “Open Innovation” that is similar to Tesla’s announcement that it would open-source its patents, which we have analyzed before.

This Motley Fool interview analogizes this current collaboration to an older one, dating back to World War II.

Business historians have studied that and shown that, just in the U.S., it took over 1,000 scientists from 39 major labs to join forces and overcome the scientific, technological challenges that needed to be overcome in order to offer antibiotics on a commercial scale. If it hadn’t been for World War II and the war effort, when the government said, “Hey, this is a national priority, so you guys join forces and do it,” we might have witnessed a case of collective industry failure. But the industry was forced to collaborate, and together they cracked that nut.

Another example of when businesses really came together to produce a plethora of innovations is when JFK announced to the country that he wanted to take America to the moon. Here is Dov on this historical moment:

The President had inspired the country to journey into a new era that leveraged modern technologies and changed the course of history, resulting in one of humanity’s most ambitious achievements. The effort produced numerous innovations – solar energy, infrared ear thermometers, de-icing systems for planes, safer tires, more nutritious baby food, among dozens of others – that have improved millions of lives in the past five decades.

The connection between antibiotics and NASA? In both cases business was  on a journey to pursue something significant and that, perhaps just as importantly, would require risk, entail ups-and-downs and tremendous uncertainty, which typically runs against the grain of business’ linear mindset. Read more about how our take on why business needs to “journey” again.

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