Closed Innovation: A Case Study

Since pharmaceutical organizations are not operating alone within this system, it is of great importance that all groups involved are pooling their resources and foster the relationships within the system. Many patents are kept within the organization, remain unutilized so that the competitors will not profit from their ideas. The pharmaceutical organizations should consider the patent as a commodity rather than a secret to be protected by the organization. This situation can be referred to as an ‘closed innovation’ paradigm for drug development. The term ‘closed innovation’ is promoted by Henry Chesbrough (2003) and seen as a virtuous circle. Organizations invest in internal R&D, which lead to breakthroughs drug development. These discoveries

GSK launched in 2007 a Center for Excellence for External Drug Discovery. This is a externally focused R&D team that facilitates drug discovery alliances with external partners. Pfizer is another organization that integrated open innovation in their business by establishing Centers for Therapeutic Innovation. These centers are aimed at founding global partnerships between academic medical centers and Pfizer. After this collaboration, Pfizer could reduce their R&D budget. The introduction of platforms at which the organizations can share their knowledge might be another solution, The Acces to Medicine Index (2015) is an organization that helps the pharmacists. It recognizes organizations for their investments in access to medicine, raising awareness of relevant issues by providing a platform for all stakeholders to discuss the best practices within the pharmaceutical industry and to increase transparency in order to assess, monitor and improve performances (Lee & Kothler,

The organizations need to be transparent, potential partners will see the organization as the partner of choice (Schumacher et al., 2013). The organizations should be aware of the tensions that might arise within the organization. The R&D departments might feel squeezed out because this department thought they were responsible for the innovation. Therefore, it is of great importance to involve the R&D department in this partnership. Employees should not only have the relevant expertise but also need to be skilled in working with external partners. The management have to make sure that the organization recognizes its own resources which can be applied to nurture collaborations and monitoring their progress to ensure success (Hunter, 2010). A change of culture is needed to successfully implement open innovation (Heap, 2010). The patent should no longer be regarded as a protection, but as a marketable asset which can be bought, traded and sold. Open innovation can help smaller organizations getting access to resources that would otherwise be out of reach. Downside is that smaller organizations might lose their voice and get ‘frozen into the rigid work practices of larger partners (Heap, 2010). It might not be easy