A major reform of the pharmaceutical industry is taking place as profitable drug patents come to an end, budgets are tight, and research and development costs are rising. Rising costs to complete trials of a new drug and bring new drugs to market are increasingly difficult to find. In an effort to minimize costs, the staffing of the research and development departments of pharmaceutical companies is being reduced. Pipelines are shrinking for many pharmaceutical companies and they are beginning to look for innovative ways to generate new revenue.
With the loss of these comprehensive teams, it is no longer feasible for one company to manage all aspects of research, development, creation, testing, and sale of each new drug. Many of the major pharmaceutical companies are changing drug research and development by forging partnerships with biotech startups.
These biotech startups are driving basic research on developing new pharmaceuticals and building pharmaceutical company portfolios. Currently, major patents for a large number of brand name drugs are ending; these companies will lose money as the drugs become available in generic form. Biotech startups will conduct 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 offer ongoing options for treating patients. Since the main areas of medication are oncology, central nervous system disorders, diabetes and immunology.
Seeking outside companies for research, such as biotech startups, provides an innovative perspective on potential products in the biotech field. Venture capitalists seek to minimize risk in their investments. Biotech startups offer minimal investment risk by granting exclusive rights to any research or product to pharmaceutical companies created through this collaboration. Rewards are used as motivation to achieve milestones, budgets, and results. This ensures that investment in biotech startups will create business in the future, as each company invests heavily in their success. Biotech startups benefit from these partnerships as they struggle to raise funds to get started and survive. These associations are an ideal situation to create partnerships with pharmaceutical companies that have financial backing.
With the challenges facing both pharmaceutical companies and biotech startups 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 from these new partnerships.
