{"id":34581,"date":"2018-11-13T18:43:13","date_gmt":"2018-11-13T23:43:13","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/eli-lilly-improving-rd-through-open-innovation\/"},"modified":"2018-11-13T18:43:13","modified_gmt":"2018-11-13T23:43:13","slug":"eli-lilly-improving-rd-through-open-innovation","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/eli-lilly-improving-rd-through-open-innovation\/","title":{"rendered":"Eli Lilly: Improving R&D Through Open Innovation"},"content":{"rendered":"

R&D in the Pharmaceutical Industry<\/u><\/strong><\/p>\n

R&D spending in the pharmaceutical industry exceeds $100 billion annually [2], and industry experts estimate the average pre-tax cost of a new prescription drug is approximately $2.6 billion [3]. Despite these substantial investments, overall R&D productivity remains stagnate. For example, a common measure of R&D productivity is the number of new molecular entities receiving FDA approval. This figure has held constant at an annual rate of 21.8 in recent years, a trend insufficient to grow the industry long-term [4]. As a result, pharmaceutical companies are actively searching for opportunities to improve R&D productivity.<\/p>\n

Eli Lilly\u2019s Open Innovation Drug Discovery Program<\/u><\/strong><\/p>\n

In response, Eli Lilly (\u201cLilly\u201d) launched its Open Innovation Drug Discovery (\u201cOIDD\u201d) program, an online platform that encourages academic and corporate researchers to partner with Lilly in the early-stage development of new drug therapies. After signing a no-cost OIDD Program Agreement, researchers are granted access to a wide-range of Lilly\u2019s internally developed R&D capabilities to further their research efforts [5]. For example, researchers can access proprietary design tools for creating and modifying molecules and other compound structures. As these structures are developed, researchers can choose to submit them for OIDD screening, a process that uses in silico analysis to identify compounds with the potential for commercial viability [6]. Other resources available to researchers include access to Lilly\u2019s library of proprietary compounds and remote experimentation in Lilly\u2019s automated synthesis laboratory [7].<\/p>\n

\"\"<\/a>
R&D capabilities available to participating researchers [8].<\/figcaption><\/figure>Intellectual Property Protections<\/u><\/strong><\/p>\n

To encourage participation, Lilly has structured the OIDD program in a way that protects researchers\u2019 intellectual property (\u201cIP\u201d) and addresses a common concern of participants in open innovation solutions known as Arrow\u2019s Information Paradox [9]. Researchers\u2019 data is stored confidentially on \u201cneutral\u201d networks hosted by Lilly, and data shared with Lilly for testing is converted to \u201cencoded fingerprints\u201d to protect confidentiality [10]. If testing indicates a potential for commercialization, Lilly has the first right to negotiate a licensing or collaboration agreement with the researcher to continue commercialization efforts. Regardless of whether an agreement is reached, participants retain the right to use their findings in future publications, grant proposals, and research [11].<\/p>\n

\"\"<\/a>
Intellectual property protections provided on the OIDD platform [12].<\/figcaption><\/figure>Growth in the OIDD Program<\/u><\/strong><\/p>\n

Since its initial launch in 2009 [13], participation in the OIDD program has grown to 938 scientists from 490 institutions in 39 countries [14]. Over 560 thousand molecular structures have been screened with 32% passing the initial filter indicative of potential commercial viability [15]. 58 thousand physical samples have been sent to Lilly for follow up testing [16], and approximately 1,800 of the most promising structures are currently being pursued [17].<\/p>\n

To continue addressing open innovation in the short term, Lilly has expanded the research disciplines to which the OIDD program applies. Traditionally, the program focused on applications in areas where Lilly already possessed strategic focus and expertise, such as neuroscience, cardiovascular, and oncology [18]. However, the platform has expanded to screen for other applications such as tuberculosis, malaria, and other tropical diseases. This screening is often done in conjunction with partner institutions such as the Infectious Disease Research Institute and the Medicines for Malaria Venture [19].<\/p>\n

In the medium term, the company is focused on improved R&D productivity through its Next Generation initiatives. The primary goals of Next Generation are to reduce the time required to bring medicines to patients and to ensure the R&D pipeline remains well-stocked, primarily through partnering with third-parties and through acquisitions [20]. It remains to be seen if Lilly can effectively integrate R&D capabilities acquired from third-parties into the existing OIDD platform.<\/p>\n

Additional Opportunities <\/u><\/strong><\/p>\n

In the short term, Lilly should consider opportunities to bring additional researchers into the OIDD program. There are several potential avenues for achieving this goal. First, Lilly could continue to expand the program\u2019s focus areas beyond the applications listed above to broaden the applicable researcher base. As another option, Lilly could investigate opportunities to further assist researchers in publishing their findings, to provide additional participation incentives.<\/p>\n

In the medium term, Lilly has an opportunity to develop machine learning capabilities that can be applied to the data collected through the OIDD platform. As more researchers engage with the platform, the potential for data collection is significant. One study noted the OIDD program has generated over 1.8 million data points from the information submitted by participating researchers [21]. Machine learning brings the potential to rapidly process this data for hidden patterns, trends, and other indications of potentially effective compounds [22].<\/p>\n

Open Questions<\/u><\/strong><\/p>\n

Going forward, Lilly must address several questions related to the OIDD program. First, should Lilly further expand the focus areas of the program beyond its existing capabilities, to encourage wider researcher participation and data submission? Second, can Lilly effectively incorporate newly acquired R&D capabilities from third-parties into the OIDD platform for researchers to leverage while also providing the same level of IP protection to researchers?<\/p>\n

(Word Count: 799)<\/p>\n

 <\/p>\n

Footnotes<\/u><\/strong><\/p>\n

[1] Image referenced from Eli Lilly and Company, \u201cFor Scientists, By Scientists: Lilly Open Innovation Drug Discovery Program 2018,\u201d https:\/\/openinnovation.lilly.com\/dd\/includes\/pdf\/OIDD_For_Scientists_By_Scientists.pdf<\/a>,\u00a0 accessed November 2018.<\/p>\n

[2] A. Schuhmacher, P.G. Germann, H. Trill, and O. Gassmann. \u201cModels for open innovation in the pharmaceutical industry,\u201d Drug Discovery Today<\/em>, volume 18, no. 23 \/ 24 (December 2013): p. 1133, https:\/\/www-sciencedirect-com.ezp-prod1.hul.harvard.edu\/science\/article\/pii\/S135964461300247X<\/a> . ScienceDirect, accessed November 2018.<\/p>\n

[3] S. Chilukuri, E. Fleming, and A. Westra. \u201cDigital in R&D: The $100 billion opportunity,\u201d McKinsey.com, December 2017. https:\/\/www.mckinsey.com\/industries\/pharmaceuticals-and-medical-products\/our-insights\/digital-in-r-and-d-the-100-billion-opportunity<\/a>, accessed November 2018.<\/p>\n

[4] A. Schuhmacher, P.G. Germann, H. Trill, and O. Gassmann. \u201cModels for open innovation in the pharmaceutical industry,\u201d p. 1133.<\/p>\n

[5] Eli Lilly and Company, \u201cFor Scientists, By Scientists: Lilly Open Innovation Drug Discovery Program 2018,\u201d https:\/\/openinnovation.lilly.com\/dd\/includes\/pdf\/OIDD_For_Scientists_By_Scientists.pdf<\/a>,\u00a0 accessed November 2018.<\/p>\n

[6] Eli Lilly and Company, \u201cOpen Innovation Drug Discovery \u2013 OIDD Design,\u201d https:\/\/openinnovation.lilly.com\/dd\/what-we-offer\/design.html<\/a> , accessed November 2018 .<\/p>\n

[7] G. Caroll, S. Srivastava, A. Volini, M. Pi\u00f1eiro-Nu\u00f1ez, and T. Vetman. \u201cMeasuring the effectiveness and impact of an open innovation platform,\u201d Drug Discovery Today<\/em>, volume 22, no. 5 (May 2017): p. 780, https:\/\/www-sciencedirect-com.ezp-prod1.hul.harvard.edu\/science\/article\/pii\/S135964461730034X<\/a>. ScienceDirect, accessed November 2018.<\/p>\n

[8] Eli Lilly and Company, \u201cFor Scientists, By Scientists: Lilly Open Innovation Drug Discovery Program 2018.\u201d<\/p>\n

[9] A. King and K. Lakhani. \u201cUsing Open Innovation to Identify the Best Ideas,\u201d MIT Sloan Management Review<\/em>, volume 55, no. 1 (Fall 2013): p. 44, https:\/\/search-proquest-com.ezp-prod1.hul.harvard.edu\/docview\/1438826527\/B817DBB04EA64B8BPQ\/1?accountid=11311<\/a> . ProQuest, accessed November 2018.<\/p>\n

[10] R. Narsalay, S. Brunswicker, M. Bagherzadeh, and T. Kawalec. \u201cOpen Innovation at Eli Lilly and Company,\u201d Accenture.com, 2017. https:\/\/www.accenture.com\/t20170220T002618__w__\/hu-en\/_acnmedia\/PDF-43\/Accenture-Open-Innovation-At-EliLilly-Company.pdf<\/a> , accessed November 2018.<\/p>\n

[11] \u201cLilly Launches Open Innovation Drug Discovery Platform to Help Find Potential New Medicines Where Medical Need is Great,\u201d press release, September 26, 2011. PR Newswire via ProQuest, https:\/\/search-proquest-com.ezp-prod1.hul.harvard.edu\/docview\/896539808\/C0CDD97DB7014D06PQ\/2?accountid=11311<\/a>, accessed November 2018.<\/p>\n

[12] Eli Lilly and Company, \u201cFor Scientists, By Scientists: Lilly Open Innovation Drug Discovery Program 2018.\u201d<\/p>\n

[13] G. Caroll, S. Srivastava, A. Volini, M. Pi\u00f1eiro-Nu\u00f1ez, and T. Vetman. \u201cMeasuring the effectiveness and impact of an open innovation platform,\u201d p. 780.<\/p>\n

[14] Eli Lilly and Company, \u201cFor Scientists, By Scientists: Lilly Open Innovation Drug Discovery Program 2018.\u201d<\/p>\n

[15] Ibid.<\/p>\n

[16] Ibid.<\/p>\n

[17] G. Caroll, S. Srivastava, A. Volini, M. Pi\u00f1eiro-Nu\u00f1ez, and T. Vetman. \u201cMeasuring the effectiveness and impact of an open innovation platform,\u201d p. 782.<\/p>\n

[18] \u201cLilly Launches Open Innovation Drug Discovery Platform to Help Find Potential New Medicines Where Medical Need is Great,\u201d press release, September 26, 2011.<\/p>\n

[19] Eli Lilly and Company, \u201cFor Scientists, By Scientists: Lilly Open Innovation Drug Discovery Program 2018.\u201d<\/p>\n

[20] Eli Lilly and Company, \u201c2018 Partnerships and Pipeline,\u201d https:\/\/www.lilly.com\/jpm-2018-partnerships-pipeline<\/a> , accessed November 2018.<\/p>\n

[21] G. Caroll, S. Srivastava, A. Volini, M. Pi\u00f1eiro-Nu\u00f1ez, and T. Vetman. \u201cMeasuring the effectiveness and impact of an open innovation platform,\u201d p. 784.<\/p>\n

[22] W. Shih, \u201cBuilding Watson: Not So Elementary, My Dear! (Abridged),\u201d HBS No. 9-616-025 (Boston: 性视界 Business School Publishing: 2016), p. 16<\/p>\n","protected":false},"excerpt":{"rendered":"

Pharmaceutical company Eli Lilly uses its open innovation platform to encourage collaboration with the broader scientific community in the early-stage development of new drug therapies.<\/p>\n","protected":false},"author":11614,"featured_media":34619,"comment_status":"open","ping_status":"closed","template":"","categories":[4239],"class_list":["post-34581","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-open-innovation","hck-taxonomy-organization-eli-lilly","hck-taxonomy-industry-pharmaceutical","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2018\/","yoast_head":"\nEli Lilly: Improving R&D Through Open Innovation - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/eli-lilly-improving-rd-through-open-innovation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Eli Lilly: Improving R&D Through Open Innovation - 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