Scientific Research for Drug Discovery and Drug Development

Assignment I                     

In the pharmaceutical industry, firms differentiate, primarily on the scientific research for drug discovery and drug development. The industry has recently undergone a change from “random” to “rational” drug discovery that has not only changed the scope and scale in research but also create competitive advantages. Till date, Novartis has had a strategy deeply rooted in internal discovery and developmental capabilities, which led to external alliances and collaborations resulting in the organic growth.

Now, we need to decide which innovation should be funded in order to reduce the allocation of net sales as R&D expense. The key to managing innovation will be manage funds available to assist in breakthroughs that would benefit the company in the future. As per the scenario stated, my suggestion will be to cut funding from the a few projects to remain within the band suggested by the board.

The Cambridge research centre, headed by Fishman, was one of the key innovation centres looking at scientific breakthroughs by discovering the pathways between similar diseases. Under Fishman’s leadership, the centre had adopted a more science-based research technology. Through this technology, the large firms will be able to realize returns to scope, sustain the diverse portfolio of ongoing researches and use the spillovers of knowledge. This science-based approach will help improve the quality of the research helping Novartis launch a single drug in multiple disease areas, which would help grow the target market and save on development time and money that would have been invested to commercialize the drug in the new market. Additionally, this will provide detailed knowledge about the diseases will offer scope for specialization that may results in economies of scale at the level of the research. We will want to fund the increase in the R&D budget to assist these innovations.

Novartis has had a strong partnership with FMI. Although this partnership has previously given breakthroughs such as Gleevec, the current scientific research from FMI has not resulted in any competitive advantage. Due to the underperformance of the scientists, we can downsize. To maintain the partnership, we can propose collaboration with NIBR that will not only help increase research productivity but also increase the total stock of knowledge available to all the researchers. This may give us an opportunity to discover pathways to other diseases which would help expand the target markets for the blockbuster drugs. This will not affect the research objectives significantly and will give an opportunity to the scientists from both institutions to collaborate for better solutions.