A major overhaul of the pharmaceutical industry is occurring as patents on lucrative medications are ending, budgets are limited, and costs of research and development are increasing. The increased costs to complete testing on a new drug and push new drugs to the market are becoming increasingly difficult to find. In an effort to minimize costs, workforces within the pharma companies research and development departments are being downsized. Pipelines are dwindling for many pharmaceutical companies, and they are beginning to look for innovative ways to create new income.
With the loss of these integral teams, it is no longer feasible for one company to manage all aspects of research, development, creation, testing, and sales for each new drug. Many major pharmaceutical companies are shifting the research and development of drugs by forging partnerships with biotech start ups.
These new biotech companies are driving the basic research on developing new pharmaceutical products and building pharmaceutical companies portfolios. Currently, major patents on a large number of branded drugs are ending; these companies will lose money as the medications become available in generic form. Biotech start ups will perform much of the necessary research on all aspects of human health and genetics, while creating the foundation for new pharmaceuticals. Biotechnology companies provide innovative research and technology, and are providing ongoing options for the treatment of patients. As the major areas of medication are oncology, central nervous system disorders, diabetes, and immunology.
Looking to external companies for research, such as biotech startups, provides an innovative perspective on potential products in the biotechnology field. Venture capitalists are looking to minimize risk in their investments. The biotech start-ups provide minimal investment risk by giving exclusive rights to any research or products to the pharmaceutical companies created through this collaboration. Rewards are utilized as motivation to meet milestones, budgets, and outcomes. This ensures that the investment in the biotech start-ups will create future business, as each company is heavily invested in their success. Biotech start-ups benefit from these partnerships as they are having difficulty raising funds to start and survive. These partnerships are an ideal situation to create partnerships with pharma companies that have the financial backing.
With the challenges both pharmaceutical companies and biotech startups are facing in today’s economic climate, creating a partnership between these companies is the best hope for both industries to survive and excel. All aspects of healthcare will benefit with these new partnerships.