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Summary

The starting point of this report is to find out how important innovation is in any area of business, then what Innovations are used within the pharmaceutical industry, and ultimately How the innovation of the prescribing drug 'Statin' has enhanced allowing it to become more transitional as a well known Pharmaceutical Drug.

Areas of Discussion will be the Radicalisation of 'Statins', a Cholesterol Lowering Drug , the Incremental Innovation that was required for Manufacturing these Drugs to Patients, and how Innovation has stimulated, and is currently being adopted, Implemented and Integrated with other areas of innovation to Provide better frameworks for Success from a Commercialised outlook.

This Review shall solely focus on, the Pharmaceutical Industry, and it's Services as a drug providing industry.

In Discussing the Implementation of The Types of Innovation and the reasons for choosing them; the benefits, as well as the detriments of each Adopted Innovation in the Pharmaceutical Industry will be analysed.

The following areas will be examined and reviewed;

  • Innovations currently being used in the Pharmaceutical Industry
  • Why Radical and Incremental Innovation are so Important in the Pharmaceutical Industry
  • How Innovation is a Continuously Evolving Field
  • Innovation in the Research & Development of 'Statins'
  • The Impact of 'Statins' on a Commercialised Scale
  • The 21st Century approach of Combining areas of Innovation together
  • Collaborative Innovation, a new paradigm in the 21st century pharmaceutical World

An Integral area of Review will be the Importance of Innovation in any Organisation within the Business world, and how new approaches in Innovation are adopted regularly as changes in society and Businesses grow.

In addition to this, the area of 'Statin' sold on a Commercial Market Growth scale will be explored and discussed.

Introduction

Aim

This report shall be focused on the innovation, and how innovation plays an important part in any business framework. Specifically discussed will be the benefits of using Innovation techniques in Businesses, and the various range of Innovation that business choose to adopt when selling there product or providing a service.

Through the use of significant decisions models, theories and latest adopted strategies in innovation, the substantiation will conclude which innovation is best implemented within the pharmaceutical Industry and, why this continuous changing Framework is seen to be critically imperative in regards to the introduction of new ideas, and inventions to be a success.

Adapting one type of innovation into another, can further enhance and increase the the individual characteristics to complement each other, and provide the best suited and most accurate type of innovation's to use within the organization. By doing so a new paradigm in innovation can be reached, and thus strengthen the process of developing the idea/invention into a successful, profitable by product or service.

Through use of research and development pharmaceutical businesses can see which innovation tool is best to adopt and implement. Delegating the correct responsibility in carrying out the tasks of innovation can also reduce the risk factor of the sale of the product/service on the market.

Definition of Innovation

"Innovation is the Process by which an idea or invention is translated into a good or service for which people will pay".

Innovation has provided recognition into the era of enhancements in products and services through the phenomenon by the work of the Austrian-American innovation-theorist Joseph Schumpeter. Prior to 1960's, Innovation has since soared, "though, with particularly rapid growth during the last ten years or so, as suggested by Fagerberg, [2004, pp 125-159].

Innovation involves deliberate application of information, imagination, and initiative in deriving greater or different value from resources, and encompasses all processes by which new ideas are generated and converted into useful products. Although many innovations are created from inventions, it is possible to innovate without inventing, and to invent without innovating.

What is Innovation

Innovation is concerned with identifying how firms use their existing knowledge and resources to develop goods, processes and services. Innovation is a key area in any organisation.

It is a new way of doing something. It can be referred to as incremental, emergent, radical or revolutionary thinking, in products, processes, or organizations.

The historical and cultural view in drug innovation suggests the broader transformations of society may be required in order to change patterns of innovations.

In many fields, something new must be substantially different to be innovative, Innovation in Modern society is essential for any industry. Since innovation is also considered a major diver of the economy especially when it leads to increasing productivity, followers of innovation economics stress using public policy to sour innovation and growth.

Innovation within the Pharmaceutical

Industry

Innovation in pharmaceuticals relies on previous knowledge from preceding innovations. Boulden, et al [1970, pp 65-83] suggests that "Innovation has shifted away from novelty models and towards models in which innovation is driven technologies".

Pharmaceutical innovation includes a large number of improvements or minor changes to existing drugs, and the identification of new uses of known products. Starr C [1999, pp 107-137] defines "Incremental innovation as often motivated by the objective of extending the commercial benefits derived from existing products, particularly when original patents expire and new patents may be used to prolong market exclusivity."

The most innovative type of new drugs Priority NMEs, had been rare between the year 1989-2000, According to Institute for Health Care Management (NIHCM) [2002] "Only (15%) of all new drug approvals were medicines that used new active ingredients and provided significant clinical improvement. Drugs providing moderate innovation comprised another 28% of approvals. The other 57% of approvals were for drugs showing only modest innovation, at best: 46% made some modification to an older product containing the same active ingredient, while the remaining 11% were identical to marketed products."

Pharmaceutical innovation is more strongly linked with science and regulations then that of other industries. The link of external sources of scientific knowledge, have a direct influence on the process of innovation. Regulation has crucial impact on the shaping of drugs and the industry that extends to all areas is:

  • R& D
  • Production
  • Selling
  • Prices
  • Copy rights & Patents

Copyright and Patency laws, are especially important, and necessary for newly developed drugs within the pharmaceutical industry as it prevents other rivals from copying and developing the same ideas and distributing in same industry, The areas of innovation that have been used in the Research and Development stages of the examined drugs 'Statins' are Radical and Incremental Innovation.

What Innovation Process Is Applied Within the Pharmaceutical Industry?

It can be said that the first step, in Innovation within the Pharmaceutical sector, is that it recognizes sequentiality. Scotchmer, S [1991, pp 29- 41] argued that, "In pharmaceuticals, many drugs like insulin, antibiotics, and anti-clotting drugs have been progressively improved later, as innovators bettered previous technologies." The second fundamental step to innovation can then be the development of technology and the increasing demand for highly developed technological equipment tools.

The innovation process that is governed within most pharmaceutical Industries is the Innovation Poisson process, by which an idea is instantaneously conceived and implemented into a new product to be sold to the marketplace.

Youden, W.J. [1962, p 2] imply that, "The normal law of error stands out in the experience of mankind as one of the broadest Generalizations of natural philosophy. It serves as the guiding instrument in researches in the physical and social sciences and in medicine, agriculture and engineering. It is an indispensable tool for the analysis and the interpretation of the basic data obtained by observation and experiment".

Changes in commercialization of new ideas can extend the standard multisector Schumpeterian growth theory by decomposing the product innovation into a two-stage research activity. This analytical structure allows for comparisons in the general equilibrium innovative performance of an economy where early-stage scientific results are patentable with the general innovative performance of an economic system where these early stage results are patented, for protection.

When scientists patent their research, monopolistic research firms restrict entry in the applied R&D. Nordhaus, [1969], who explained why patents (or other IP) should have infinite length by arguing "If the sole concern is to encourage innovation, then Patents should last forever."

Measures of Innovation when introducing

Newly developed drugs

Assessing recent levels of innovation, this report uses classification systems, defining several major categories of new drugs, from very to slightly innovative.

Measures of Innovation when entering the pharmaceutical markets are as follows:

  1. The newness of the compound forming the drug's active ingredients; New Molecular Entities (NMEs)] which is the alteration of the original medicine to produce a drug with different features, such as a new dosage form or route of administration.
  2. Another measure in Innovation is, change made to original products refer collectively to all such products as "incrementally modified drugs" (IMDs).
  3. Clinical improvement is also another measure of innovation within the Pharmaceutical industry.

The FDA uses improvements like new drug applications either to a standard or swifter priority to set criteria, and to identify Drugs that provide significant clinical improvement over currently marketed products. It approves a few NDAs for drugs whose active ingredients are available in identical marketed products, usually to allow a new manufacturer to make the drug.

New products, including IMDs, Can qualify for a priority review by demonstrating such improvement, in one of four ways:

  1. Evidence of increased effectiveness;
  2. Reduced side effects and interactions;
  3. Enhanced compliance;
  4. Or use in a new subpopulation.

All prescription drugs are reviewed by the FDA's Centre for Drug Evaluation and Research (CDER). At the end of the Review process, approval may be authorised for the new product.

Standard-rated new products were the single most important driver of increased retail spending on prescription drugs from 1995 to 2000.

Discovery of Statin

The revolution of prescriptions drugs and vaccines have enabled physicians preventing fatal diseases, and helping increase the life expectancy of patients through the advancement of innovation technology in therapies and new drugs , enabling patients to live more functional and productive lives.

Medical advances in Statin, made in the past 10-20 years have identified that the areas of crisis within the medical healthcare industries, had productively reduced because of the introduction of two types of medicines:

  1. ACE inhibitors used to treat cardiovascular disease
  2. Statin drugs used to lower cholesterol

This report examines the innovative breakthrough treatments for life threatening diseases to minor modifications of drugs, focusing especially on Statin (HMG-CoA reductase inhibitors), the most potent cholesterol-lowering agents available,

Finally this report considers adopted new approaches used in innovation in order to strengthen the processes within the pharmaceutical industry, also taking into account the structural forces that have shaped the direction of pharmaceutical innovation, examining how modifying branded products approaching patent expiration can enable manufacturers to delay the threat of generic competition.

  • Its Implementation from a chemical drug to a prescribed medicine
  • Who are target market for 'Statins'
  • The importance of 'Statins' in economy
  • the Incremental and radicalisation of the development of Statins
  • The importance of Collaborative Innovation in the 21st century

What are 'Statins' and what does it help

To prevent?

Statin is a lipid lowering medicine, a medicine that lowers blood cholesterol levels by inhibiting a key enzyme that is involved in the biosynthesis of cholesterol. Statins are a type of medicine that is used in the process to lower blood cholesterol levels for patients who are at risk of having very high levels of cholesterol which can lead to various cholesterols containing plaques build up in arteries and that cause the blood to block. By reducing blood cholesterol levels, Statins are proven to reduce the risk of angina, heart attack and strokes.

Statins inhibit enzymes such as HMG-CoA reductase, which controls the cholesterol that is produced by the liver. Statins act to replace the reductase that exists in the liver, by slowing down the action of cholesterol that is being reduced in the production process. This then goes on to decreasing cholesterol enzymes thus reducing the level of risks of angina, heart attack and strokes.

Statins can reduce the chance that conditions will worsen and can delay progression of the diseases for people who suffer from the following conditions

  • Those who have a history of heart attacks
  • Those who suffer from heart disease
  • Those who suffer and may be at risk of Diabetes, or development of atheroma

Following on from how Statins work, and what they help to prevent. The next area to be reviewed will be the area of drugs similar to those of t 'Statins. There are as follows:

  • Atorvastatin
  • Cerivastatin
  • Fluvastatin
  • Lovastatin
  • Mevastatin
  • Pitavastatin
  • Pravastatin
  • Rosuvastatin
  • Simvastatin.

The above drugs can also be referred as "me-too" drugs. "Me-too" drugs are those that may refer to have a similar molecular structure, which may be used to treat the similar conditions. For a drug to be referred to as "me-too" drugs its manufacture must not have undergone any new research in its creation.

Examining things from an economic standpoint, manufacturers in investing in a new drug product, and predicting that it will become the next "best-selling" drug, most likely search for ways to improve methods in which its own drugs becomes the leading brand, and there a market leader. Innovation provides a means of improving research and development techniques.

In today's globalised economy, drug research does not occur in a box. While manufacturers may be very secretive about their newest drugs, it is more likely that some not all. When manufacturers have at least some idea about what other are working on. Research in any industry is an important building process. While few scientists develop groundbreaking drugs from no prior research, most work within and react to already existing knowledge, as is the case for 'Statins'.

In order for a manufacturer to be ahead of the game, as competitiveness is always present in any industry, and thus in any market, the method of applying Patents to their idea or invention is crucial.

'Patency' Rights

The following are the legal aspect of innovation within businesses, and in particular, innovation protection within the pharmaceutical industries. For each invention, or idea implemented, Researched and developed, a sense of security must be sought in order for that idea or conception to be protected, and not stolen by rivals.

Intellectual property rights (IPRs), such as patents and copyrights, are an important means used by manufacturers to help protect their investments in innovation. They are designed to expand industrial development and economic growth.

Patent laws are those laws which prohibit drug manufacturers from copying and marketing already existing drug products, until the time that their patent expires. In order to be approved, new drugs must undergo an extended trial period designed to determine not only the drug's safety but also its efficacy. The introduction of new drugs must represent a medical advancement, even if small, in order to be approved and marketed.

IPRs protect investments in innovation by granting the innovator a temporary monopoly on the use of the innovation. This prevents rapid imitation that could cut into the innovator's returns and decrease the incentive to innovate, this is extremely important within the pharmaceutical industry as it prevents those who desire to steal and exploit research & development of drugs in a harmfully way.

Allowing scientific findings, R&D of a new drug to be patented, would introduce an interface between intellectual speculation and consumer needs, thereby channelling scientific investigation in the direction more demanded by the economy.

A common belief that patents are normally acquired to protect new drugs, thereby recovering Research and Development investments, and the availability of a variety of different therapies is decreasing and almost declining.

Thousands of patents are applied for or granted concerning pharmaceutical-related inventions. The number of patents acquired in relation to latest inventions otherwise known as scientific discoveries, rather than those of technical solutions, is increasing.

This form of privatization of science has been criciticaly argued, however the main focus of this area are Patents, which merely focuses on incremental or minor developments.

Statin as a Incremental Innovation

In today's environment, the need for a more continuous improvement in products and process is widely recognised. However the continual streams of innovation are nit always identified.

Mobilising a large amount of the workforce in a process of 'incremental' problem solving is beneficial as it is essential within the pharmaceutical industries.

Quality of healthcare and how its improvements through the use of incremental innovation, and the Radicalisation of existing inventions being invented, or implementing preconceived ideas can lead to a lot of rivalry.

Due to the increased levels of competition amongst Manufacturers, suitable marketing of newly developed drugs should to be explored. As there are many rivals, when processing the manufacturing and supplying of their drugs vast amount of different approaches that rivals adopt should be taken note of.

Many different companies could possibly be working on similar drugs, and sometimes innovation independently may not lead to a novel drug but to a less well-recognized addition to an existing drug class. Implementing additional methods of innovation such as incremental innovation can give the product its distinctiveness from the standard process o manufacturing "me-too" drugs.

Although such medicines do not make important clinical advances, they increase physicians' prescribing choices, thus enabling them to match the drug to the needs of the patient. In some cases, modified drugs enhance patients' convenience.

Highly innovative drugs - medicines that contain new active ingredients also provide significant clinical improvement. Drugs providing modest innovation are most common.

Another factor to be recognised when reviewing the Pharmaceutical Industries is that of Technological advances. These advances tend to occur incrementally, one step at a time. As a result, progress is made over time, as many small Steps are taken in the creation of newly developed drugs, such as Statins. Using incremental innovation within the pharmaceutical industries provides for an improvement improvement on existing drugs, thereby adding to a drug class, increasing competition among drugs, and a creating a stimulus for further innovation.

As the National Research Council [1996] observed "the cumulative effect of numerous minor incremental innovations can sometimes be more transforming and have more economic impact than a few radical innovations or 'technological breakthroughs.' The net effect of increasing the number of drugs through innovation leads to advances in safety, efficacy, selectivity, and utility of drugs within a specific class."

To bring to a close Incremental Innovation, The point of Pharmaceutical industries depending heavily on incremental innovations, whilst majority of incremental innovation can lead to many cost savings in different areas. These innovations can result in savings in the following areas;

  • Treatment costs being reduced
  • Shortened hospital stays
  • Productivity increased, therefore absenteeism is lowered
  • Reduced drug costs from increased competitors amongst pharmaceutical manufacturers

Statin as a Radical Innovation

An Important Essential radicalisation that has arisen within the pharmaceutical industry is that of newer more successful models and frameworks.

It is generally appreciated that marketing models can be used to interpret complex relationships that are evident in a marketing system. When evaluating decisions and identifying alternative strategies and tactics within the pharmaceutical industry this 'New Product Launch Strategy' model is currently being used.

This model was developed to enhance communication between corporate level staff and subsidiary level staff, and can be used to implement and/or facilitate the strategic marketing concept within a pharmaceutical company. The model can also be used to focus attention on risk reduction/elimination associated with market entry.

The model can also be used by marketing practitioners employed by pharmaceutical companies to make tactical and strategic decisions;

Pan, [1999, p41] suggests "to evaluate a new product launch strategy, and to devise international marketing entry plans and strategies, New decisions should be formulated".

A launch strategy can determine the performance of a new product on the market. The strategic launch decisions are made early in the new product development process and do affect the tactical launch decisions made at a later date, it is important to understand why in terms of the decision-making, the process itself can be refined with time.

Pan [1999, p. 41] stated that the strategic launch decisions should be categorized as follows;

  1. product strategy
  2. market strategy
  3. Firm strategy.

These launch strategies were identified using the Aaker, [1995, pp 16-23] framework that was applied to the pharmaceutical industry in order to identify the industry specific factors.

Pan, [1999, p 42] modified and simplified the Aaker, [1995, pp 16-23] framework in three ways.

Firstly, the framework was given a new product development emphasis while maintaining the dynamics of strategic marketing. Secondly, it was simplified in order to incorporate the application of new product launches. Thirdly, it was redesigned to identify the strategic launch decisions relevant to a new product.

The simplified framework encompassed two main elements:

  • an external analysis (customers, competitors, the market and the environment in which the new product would compete
  • An internal/self-analysis of the company (the company's overall performance and strategic options). The opportunities and potential threats for a new product were defined. As regards the internal/self-analysis, the company's resources,

'Collaborative Innovation Strategy'

In the pharmaceutical industry a new adopted approach has been used, where Many Pharmaceutical Industries through research and development analysis have successfully innovated evolutionary and revolutionary change though the managing of multiple organizational architectures.

Managers have structurally separated teams within the organisation, so that a division of workers can work on the incremental processes, whilst others are housed in different facilities working on the radicalisation of the chemical advancements of the drug.

Another method had had undergone trail period, and proven to be effected was where the organisations implemented temporal separation, assigning teams to work full time in incremental innovation for a period of time, and then switch to work full time in radical innovating for another period. This had successfully reduces some risk factors within the innovation of implement newly developed drugs on the market.

Enhancements in the knowledge and concepts of combining different areas of innovation can reduce risk factors thereby strengthening the internal framework for a Pharmaceutical Manufacturer. Innovation being a crucial factor in any industry , it allows the devolvement of new products and services to be developed in a most cost effective, low risk, and compatible strategy, thereby being a beneficial and essential key area in any organization.

They approach of combing two areas of innovation 'Radical' and 'Incremental' especially in the Pharmaceutical industry, allows manufacturer to be ahead of its competitors by reduce risk factors, and becoming more cost effective, but also it allows Expenditure too be reduced through minimising the research and development stages of introducing new drugs on the market, and then developing and distributing those drugs on a more expanded global scale.

The Impact of Incremental & Radical Innovation

Of 'Statins' on a Commercial scale

The implementation of Statin microorganism has become the most common cholesterol reducing drug, on the market.

Emphasis on incremental drug development, especially where large brand manufacturers are concerned, have allowed companies to have growth within their franchises by adding line extensions, new products using the same active ingredient, or by differing from the Original like convenient dosing forms. Such enhancements enable manufacturers to attract new patients and sustain or raise the prices of popular drugs.

The use of existing knowledge and resources to invent Statin, led to the Innovative process, which led to the major distribution within the pharmaceutical industry. This has Given 'Statin' a large advantage in the market, as the competitive threats are quite low, and risk factor minimal , as the product itself is such a 'success'. Here the innovation can be said to contain both incremental and radical innovation adapted to introduce collaborative innovation new paradigm.

In today's society world the economic health of nations and the competitiveness within organisations can be seen as determined largely by the ability to develop, commercialize, and most importantly capture economic benefits from scientific and technological innovations.

Conclusion

Discoveries

The discoveries made this research are as follows;

  • Pharmaceutical Drugs within the industry is that both Radical and incremental innovation can be combined and customized to produce a new paradigm 'Collaborative Innovation'
  • In the pharmaceutical industry a new adopted approach has been used within the Pharmaceutical industry where the use of innovations is successful both in case of evolutionary and evolutionary change through managing multiple and contradicting organizational architectures.
  • Managers structurally separate teams to work on incremental and radical innovations often housing them in different facilities.
  • They implement division, assigning teams to wok fully and consistently in incremental innovating for a period of time, and then switch to work solely in radical innovation for another period, thereby reducing risk factors.
  • Enhancements in the knowledge and concepts of combing different areas of Innovation can reduce risk factors and thereby strengthen industries for future investments.

Finally to conclude, Innovation is a crucial factor in the pharmaceutical industry, as it allows new drugs to be researched & developed, and then prescribed to public, which is beneficial to the economic health of the population and therefore promoting a long-term healthy lifestyle to those of Heart concerns, Blood pressures and Diabetic problem.

Recommendations

The synthesis of combining two areas of innovation, whatsoever they are, may allow for a more balanced successful strategy. As society continues to grow, and new strategies and concepts emerge, sometimes the best method to apply within a framework can be evolved from the original source. Pharmaceutical industries can be at advantage my researching further into areas of innovation and seeking the success factors from each area, and collaborating them to produce newer more update advance paradigms that would suit its organisation best.

Bibliography

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Websites

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