Big tech and Big Pharma have proved pivotal in driving up living standards and creating our modern world.
Over many decades they’ve also each relied heavily on patents and acquisitions to ensure they’re in a position to keep refreshing their R&D pipelines.
However, the way that each has traditionally built and leveraged its intellectual property portfolio is very different.
Two Worlds Colliding
The rise in connected medical devices and the emergence of digitally driven healthcare means the worlds of Big Pharma and Big Tech are rapidly converging.
There are a lot of positives that can emerge from this but, a greater appreciation of the differences between each side’s operating model must first emerge.
A significant difference between the two industries is the role of the standards setting organisations (SSOs).
Industry standards are critical to development in the technology, media and telecoms (TMT) space.
An SSO will outline a roadmap for a technology’s development and invite members from industry and academia to share ideas on developing the new standard.
It requires collaboration.
This approach is well illustrated in the mobile telecom sector with the evolution of 2G up to 5G (and beyond), where significant improvements on each standard were made.
The protection that companies have in this environment is based on standard-essential patents (SEPs) which are almost unheard of in the pharma world.
How the technology sector exploits patents commercially also differs from the pharma sector.
In contrast to the development of medicines, the regulatory requirements in the tech field are less rigorous and are largely governed by the SSOs.
Concepts like Patent Linkage Systems (PLS) and patent term extensions do not exist in the tech world.
The tech sector is generally focused on generating income through licensing its technologies, whereas pharma strives to maintain a monopoly on its blockbuster products and avoid the dreaded “patent cliff”.
There are, however, signs of the two worlds coming together.
The licensing model works well for platform technologies that are frequently used in drug development.
For example, AI is now being deployed to help predict the binding of small molecules to proteins, which in turn supports lead candidate optimisation and toxicity predications.
This addresses one of the biggest challenges today in pre-clinical drug discovery and development; that of identifying a drug candidate that is both effective and safe.
One company in this area has patents protecting its particular use of convolutional neural networks for drug identification but has no direct interest in drug development.
Instead, the business model is to licence the technology to pharma companies who can use it to speed up their drug discovery programs and potentially reduce the need for in vivo testing of drug candidates.
Increased collaboration between big tech and pharma
The challenges being faced by the pharma industry are so complex that new approaches, such as the aforementioned use of AI in drug discovery, will be embraced.
But AI requires a massive volume of data to function and obtaining this data tends to require either a willingness to collaborate, or the technology necessary to gather and process it.
For now, both of these concepts remain somewhat alien to much of the pharma industry.
A driving force that is bringing the two sectors closer together is the rise in big data technologies.
Pharma generates masses of data and big tech is geared up to extract value from those large data sets.
By working together to understand the different ways the two industries use data, as well as combat issues relating to data sovereignty, data sharing and data security, it will be possible to bring the full value of data analytics to the fore.
An institutional barrier in the pharma industry is that they are unfamiliar with sharing data and are hesitant to share what is perceived as a competitive advantage with third party platforms.
Furthermore, patient confidentiality is often cited as the reason for keeping data “in-house”.
Although this has some merit, an overly cautious approach could see pharma companies fail to take full advantage of the technologies available to them.
This fear of sharing can be addressed through a better appreciation of how collaboration within big tech can work.
The rise in connected medical devices and services will inevitably drive this change as already seen in other industries like the automotive sector.
This may one day require the need for them to operate to an agreed standard, meaning that we could soon be seeing SEPs in pharma.
SEPs must be licensed on Fair, Reasonable and Non-Discriminatory (FRAND) terms if they are to underpin an environment that rewards and protects innovation, while also enabling interoperability and collaboration on a wider scale.
The Impact of SEPs and FRAND licenses
SEPs and FRAND licenses may pave the way for the development of truly personalised medicines.
For example, some years ago Aprecia Pharmaceuticals received approval from the US Food and Drug Administration (FDA) for a 3D-printed drug designed to treat epilepsy.
For this process to be scalable, it will require pharmaceutical companies to make the formulations (the ink) while tech companies will provide the printers.
With multiple providers of “inks” and “printers”, standardisation will be required to avoid each patient, pharmacy or hospital having to have a battery of printers to make each and every medicine.
Every step of the process could benefit from SEPs.
Doctors could prescribe a medication according to weight, age and disorder severity for a specific patient, but the software, “ink” and printers needed to print the prescription will all have to be governed by standards that allow interoperability between drugs from different companies.
This example may seem fanciful now, just as the idea of self-driving cars being tested on public roads was 20 years ago.
The lesson being that if truly digital and personalised medicine is to become a reality, then changes in mind-set need to happen now.
Closing thought
Big tech’s nature of innovation and disruption is foreign to the pharma sector, but today’s pharma giants must adapt fast or risk becoming side-lined.
No one wants to be the next Kodak!
Equally, without a strong appreciation of how Big Pharma operates it can be very easy for Big Tech companies to make mis-steps when building out their own IP portfolio in this field.
Increasingly, IP strategies will have to be devised and implemented by cross-disciplinary teams who can leverage their expertise across these two fields.
