Unit Operations

Building a New Tech Transfer Model

As blockbuster and generic business models merge, tech transfer must change.

By Suraj Mathew, Partner, Tefen USA

Tech transfer as usual. Is this sustainable in an environment where  “usual” can mean a billion dollars in development costs, a 12-to-15 year development cycle, five to eight years of patent protection, and perhaps survival of one candidate product in 10,000?

Given the decline in blockbuster products, and the fact that R&D pipelines are drying up and patents are expiring, there is an urgent need to increase the speed and effectiveness of pharmaceutical tech transfer. In order to do that, a life science company must answer three critical questions:

  1. What is causing the industry to require more and faster tech transfers?
  2. What is needed to make tech transfer competitive?
  3. What does the future hold?

Only then can they create solutions that best fit their organization’s strategy.

Business Models are Merging

There are many factors shortening the duration of tech transfer. One lies in the differences between blockbuster and generic business models, each of which emphasizes a different core competency. With the blockbuster model, discovery is key, and the extra costs of a longer transfer are offset by higher revenue after commercialization. In sharp contrast, discovery is not important in a generic business model. Tech transfer itself is the core competency, with a focus on reengineering and creating a process for an existing product. 
The decline in blockbuster products is causing both blockbuster and generic types of business models to merge, with each adopting core competencies of the other—generics companies, for instance, now need to develop the skills of discovery.

As both types of companies shift to niche disease markets, by definition there will be more technology transfers and they will need to be conducted more quickly and easily. More niche discoveries will be needed, and the timeframe before products go generic will shrink. Over time, the blockbuster and generic models will become more alike.

Global Competition is Increasing

Also driving tech transfer is an increase in global competition. Advancements in information and communications technologies, changes in protectionism with the adoption of the Agreement on Trade Related Intellectual Property Rights (TRIPs), and the globalization of research and development activities by multinational enterprises are driving the need to better understand the proper role of intellectual property in a knowledge-based economy.

Between 1976 and 2006 we’ve seen a significant increase in the number of scientists and scientific industries in countries such as Brazil, China, and India [1]. As the growth of these scientific-based industries increase, so will the need to do things differently. Business as usual and tech transfer as usual will no longer suffice.

Knowledge Transfer and Eliminating Rework

Knowledge transfer is a critical part of tech transfer. In fact, it is the thread that ties the stages of development together. A four-stage process includes four to 10 years of discovery, three years of exploratory development, and three years of regulatory development just to launch a three year commercialization [2]. The duration contributes to the potential loss of knowledge at each step of transfer. The net effect of knowledge loss over time is the need to recreate or rework to correct or capture that loss. Recreation and rework contribute significantly to the length of time required from discovery to commercialization.

One useful tool for minimizing rework is ISPE’s Good Practice Guide for Technology Transfer, which outlines standardized processes, defines minimum documentation requirements, establishes key terms, and outlines the time and cost for tech transfer. Although this guide emphasizes active ingredient pharmaceuticals, it outlines principles that can be applied throughout life sciences.

Making Tech Transfer Competitive

The effectiveness of tech transfer is difficult to define [3]. The first challenge is setting a boundary on the technology. This is difficult today, because technology development and transfer processes practices are laden with rework loops. A critical requirement, then, is a methodology that can capture both knowledge and technology, eliminating the need for redevelopment and rework, provide a robust method for handing off knowledge and technology step by step.

The second difficulty is outlining a tech transfer process where concurrent processes are not integral to a single defined system. The next significant requirement is a clear understanding of ownership and the critical interactions between the concurrent processes. A common approach includes basic project management items such as timing, cost, and expected results. An integrated system, however, must be much more and include such factors as adding value by eliminating non-value added activities, using cross-functional teams, and utilizing crisis avoidance, conflict resolution and escalation techniques.  Simplifying documentation and records is also important.

The third difficulty is measuring the impact of tech transfer. This requires that the process be structured in such a way to drive consistency and discipline into the organization, yet encourage calculated risk taking to solve problems in new and different ways. Consistency in transfer provides flexibility within structure, eliminates unexpected variables, and shortens the overall transfer time.

The goal for tech transfer is to develop a common system that effectively captures knowledge and technology for handoff, synergistically integrates multiple concurrent activities, and creates the level of consistency and discipline. Certain steps must be taken to move toward that goal.

First, define a structured tech transfer process flow to capture the knowledge and technology:

  • Map the preferred process flow, eliminating unnecessary actions and steps that create rework loops.
  • Predefine incremental stage gates that separate current processes into defined and integrated work breakdown structures to minimize process  independence and maximize interaction
  • Define Stage gate approval-to-proceed by specific measurable criteria that must be complete before moving into the next phase of development.

Establish an organizational infrastructure consisting of a single team of management and cross-functional members that govern the structured process:

  • Set a standard definition of “value added” and “success” for tech transfer processes
  • Establish clear ownership, utilization, and cross-functional application of human resources
  • Coordinate and allocate physical resources and facilities supporting the projects
  • Ensure the consistency and standardization of methods, tools, and templates
  • Serve as a clearing house for progress measurements, conflict resolution, risk assessment, and critical decision making
  • Approve organizational readiness and conformance to plans and structure

Implement a sustaining system to ensure that consistency and discipline development:

  • Identify and focus on key performance indicators that drive overall success
  • Monitor / audit the tech transfer system and governance structure for compliance
  • Continuously identify areas for improvement and track the implementation of change
  • Report progress and status at all levels of the organization

Some organizations would balk at this approach, and based on the traditional way of handling tech transfer, they’re right. But the next stage of tech transfer requires a structured system to enable productivity. The effort required for planning, work and organizational change, is well worth it.

Future Considerations

In closing, let’s take a quick look at what the future may hold. Three key prospects (Population, Cost, and Risk Aversion) sum the affect that tech transfer will have on the pharma business, and the need for an increase in frequency and shorter tech transfer life cycles.

Population. Between 2009 and 2050 the World Health Organization expects a 30% increase in the population, to nine billion, increasing the demand for drugs and devices. These same drugs and devices also increase life expectancy, which in turn increases the number of elderly requiring drugs, devices, and services [4]. This cycle drives the need for more frequent and shorter tech transfers to meet the needs of a changing population and niche diseases.

Cost. Western life science companies must reduce the cost of goods or risk an increased loss of market share.  Learning how other industries changed will offer valuable lessons to life sciences companies, and help the industry streamline tech transfer from today’s blockbuster or generic model to a robust Lean Six Sigma model that is responsive  to customer demands and niche market changes.

Risk Aversion. “Manufacturers seem largely unwilling to take the risk of proposing novel technologies that may ultimately meet with FDA compliance. This level of risk aversion is counter-intuitive when a mere percentage increase in production capacity could result in millions of dollars in added revenues that could more than cover the costs of novel technology development” [5]. Clearly, it is time to overcome risk aversion and create innovative solutions that are compliant with FDA requirements.

Future progress will come as the old gives way to the new. As today’s blockbuster and generic business models merge, experience and lessons learned in other industries can be used to refine this new model. A basic common tech transfer life science model can then be modified to fit individual company and regional variations in business strategy.


References

1. Barton, J.H., Osbourne G.E. New Trends in Technology Transfer: Implications for National and International Policy. ICTSD Programme on IPRs and Sustainable Development. February 2007.
2. Vu, Le Trong. Joint CVG/Therapeutic Products Directorate, International Convention and Exhibition, Toronto, Canada, October 5-6, 2006.
3. Research Policy, School of Public Policy, Georgia Tech, Atlanta, GA, Technology Transfer and Public Policy: A Review of Research and Theory, by Barry Bozeman, 2000; p. 627.
4. UN Department of Economic and Social Affairs, Population Division. (March 2009). World Population Prospects. Source:
http://www.who.int/pmnch/topics/2008_populationstats/en/
5. Langer, R. Manufacturers Must Cooperate to Compete. Contract Pharma, October 2002, p.4.

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