Paras Kumar, senior specialist at The Smart Cube, examines the critical role that patent research has within the life sciences and pharmaceutical businesses beyond its traditional uses by the R&D and legal departments but also for procurement and strategy.
Patented
The filing and studying of patents is nothing new among life sciences, pharma and healthcare companies. It is fundamental for firms to protect their technologies, earn premium on their products and gain a scientific and competitive edge.
However, there is also another important reason for why businesses should look at patent research and it is the value that it can bring to their procurement and strategy-related decision making. Patent research can be used as a key business tool by deriving dynamic insights from early indications about future strategies of competitors or suppliers and understanding innovation trends within a category.
Key business areas for patent research application
We have identified four main business areas other than the usual applications where life sciences and pharma companies can find patent analysis particularly useful: innovation scouting, partner identification, sourcing strategy, market exploration and category strategy. Here are some more details on each one of these areas:
Innovation scouting – An area where patents can add tremendous value is innovation scouting. For example, a healthcare business that wants to launch a new pill or medication dispensing product may want to research proprietary technology options for automatic dispensers in the personal care space (such as liquid hand-wash).
In this case patent research can help them to:
- Explore technologies/features that may be of use in developing their own product
- Research and gain a better understanding of the customised dosage dispenser space
- Get insights into the latest developments in the automated, customised dosage dispenser market
- Examine the supplier landscape, covering level of market fragmentation, key suppliers and types of products offered
Partner identification – Patent research can help life sciences companies identify potential partners based on specific business criteria. This is particularly important if the firm is considering a strategic co-development partnership, merger or acquisition as a part of their business plan, as well as to ensure innovation within their product lifecycle.
Take for example a pharma major looking for a technology partner to develop a next-gen DNA sequencing method for drug discovery and development.
Patent research can help with discovering and choosing between two potential types of partner companies:
- Software development giants who would already have a robust platform that will need customisation for the pharma company’s precise requirements
- A university incubator-backed startup or a technology developer, who would have developed a precise system but requires the pharma company’s support and funds to test and polish it
Sourcing strategy – Companies can leverage patent research to catch early signals on whether they need to change a supplier or a sourcing destination or enable their supplier to innovate. Here are some steps firms can consider in which this is helpful:
- Tracking if a particular raw material is being disclosed in patents from a new geography/region, and does it make sense to explore new suppliers or producers from that region
- Identifying innovative alternatives – such as a complete different raw material or a new producer of similar pharma ingredients, delivery substrates or electronic components for medical devices
- Renegotiating lower price points for contracts with suppliers whose products are going off-patent
- Rejigging the supplier base wherever the procured products are likely to get patent protection
Market exploration and category strategy – Keeping up to date on the latest trends and innovations in a market or category is one of the most (if not the most) important inputs for a healthcare company’s growth machine.
Companies can achieve one or many of the following objectives with this:
- Assess whether their suppliers are working on/using cutting edge technology and stay abreast of their technology and R&D focus
- Apprise suppliers of the latest trends in the market and help them adopt cutting-edge technologies
- Keep an eye on any disruptive innovations
- Get a regular pulse of competitor activity
For instance, let’s take the cancer treatment market that has always attracted a lot of attention. The recent focus is on gene-based therapy and CRISPR is one such therapeutic technology that is gaining traction among leading drug companies. Patent rights on this gene-editing technology platform are extremely valuable, so much so that they are attracting legal disputes. However, this method of genome editing has inherent transfection inefficiencies so in this case patent research can help a pharma company discover advancements – such as sonoporation – that may help in overcoming these disadvantages.
Looking ahead - how patent research can help future proof your strategies
According to Deloitte’s latest report, the pharma industry is forecast to reach $1.06 trillion worldwide by 2022. However, pricing pressures and a second patent cliff (with an estimated $194 billion in sales at risk by 2022) could have an impact on this growth.
The business cases described above clearly show why life sciences and pharma businesses should look beyond patent research as simply a legal requirement to protect their technologies or gain competitive edge. It is an activity they should embrace as a strategic business tool and apply across the whole organisation, from procurement teams, to operations and R&D, to derive value-adding business intelligence.