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The Coming Marriage Between Open Pharma Research and Blockchain

The pharmaceutical research industry is suffering from a lack of innovation, yet we see an exponential increase in new science and technologies. Open innovation, in the truest meaning, is a disruptive model that will greatly increase our joint chances of translating new research into treatments, but we need new ways of sharing and participating in collaborative drug research. Blockchain technologies can provide the digital infrastructure that allows trusted and secure transactions of research assets. Applying smart contracts on top of such infrastructure will further increase the speed of the life science ecosystem allowing exploration, co-creation, and transaction of research assets to happen in an unprecedented manner. In fact, we can’t afford to object to such a marriage between pharma open innovation and blockchain technologies.

Is it broken? How to fix it!

Patients are waiting. Humanity needs new medical treatment, but the pharmaceutical industry and healthcare systems are struggling with innovation as it’s getting increasingly expensive and unfortunately less efficient. We are facing serious health threats: lack of antibiotics, global epidemics, cancer affecting ‘everyone’ and the question of who will pay for increasingly expensive new treatments. It is not feasible to expect novel treatment costs exceeding 100.000 USD per patient per year.

Drug research is expensive and complex, to say the least, since a broad range of highly specialised skills and vast resources are required. So much so, that it’s getting to the point where successful and efficient research and development of a new treatment can’t be undertaken by a single institution, from a competence, risk and resource perspective. Instead, the complex process requires collaboration, in particular when it comes to the earlier stages of drug discovery that rely heavily on explorative science. It’s clear – we need to find a new and better way to work together across traditional barriers, as the old one cannot deliver enough.

Opening up medical research

In an attempt to increase the chance of success in drug research some are adopting a more open approach where favouring non-competitive research activities is often referred to as open innovation, open source or open science (note the EU’s policy and vision on Open Innovation, Open Science and Open to the World). The common denominator is that increased transparency and disclosure are applied instead of confidentiality and secrecy. Although it is easier to consider openness in the early stages of pharma, it is still unclear how to implement such a change in the broader areas of a traditionally closed industry. What does ‘open’ actually mean and what is to be expected of parties when working under the open innovation banner? To some degree, a clarification as a first attempt to standardise the actual implementation of open innovation concept has been initiated (What Does it Mean to be Open in Pharma), but there is still a long way to go to create a broad and united understanding.

Collaborations, using massive open online research communities, sound appealing, promising and completely ground-breaking for pharmaceutical drug research. To a small extent, this is already happening in a few specific constellations and usually in primarily academic settings. But if we are to significantly improve how we translate new technology and research into effective, safe and cheaper novel treatments we must do better. Much, much better in how we work together. And when I say better, I mean differently, as we can’t simply do more of the same – we have to break out of the current way of doing research and business.

We could work better together

Today’s system is full of parallel work, undisclosed failures, unclear needs and is cursed by an inability to work jointly because barriers surround the traditional business models. Why is this? Perhaps because the only easy way to protect your investments and hard efforts in order to make sure you receive financial rewards is to keep your work a secret. At the same time, the need for confidentiality reduces the effectiveness of collaborations, chances of serendipity, success of exploration, and orthogonal innovation. To some degree, we still need confidentiality, of course, but to achieve more we have to reconsider the bigger gains of being more transparent (How to Accelerate Drug Discovery with Openness).

The movement of open innovation (and crowdsourcing) in pharmaceutical drug research is somewhat hampered by the uncertainty of how a contributor’s participation can be recognised and rightfully rewarded. How can we make sure that individual research contributions and intellectual ownership are transparent and secure?

Or, in other words, how can open research be conducted in a secure and trusted manner, using a digital infrastructure that is completely unsecure and distrusted, such as the internet?

Yes, you guessed it – blockchain could provide the technological solution that will enable anyone to participate and be rewarded for the contributions. Such a trusted open innovation platform can connect research needs and assets in a transparent and efficient manner. Research providers could identify open research needs or have their research assets exposed for anyone to identify as an opportunity. This can only happen if it is absolutely clear who has done what, who owns what and what transactions of intellectual properties have occurred. It would be much easier and more valuable to provide a ‘shoulder’ for others to stand on. Only blockchain technology can currently provide such a trusted solution, and the implication of this is exhilarating!

What blockchain can do for pharma research

Blockchain in its truest nature is a technical solution that has the potential to enable collaborative drug research in real life. But only with new business models that include opening up and releasing some of the control put in place by traditional partnering agreements. What blockchain has to offer is a way to decentralise the process and remove the need to have single controlling units as this would not be a trusted solution for the community. Thinking about all parties, big and small, and collaborations as being part of a larger life science ecosystem will be truly transformative.

One of the benefits would simply be a more complete overview of existing research needs, prospects and assets. Participation would enable visualisation of the ecosystem and specific opportunities, but without the need for a 3rd party in between (as an example, the current common crowdsourcing setup usually involves a broker that acts between the solution provider and seeker which in some cases could limit the scope of reaching out toward the community and even more so, for the crowd to reach ‘in’ and provide valuable research solutions).

Also, the opportunity to digitalise research assets will greatly increase the efficiency and speed of matchmaking around global research assets and technologies. But the implementation will require an absolutely secure platform that ensures transparency of all transactions, making it completely clear who owns what. We’ve already seen that blockchain can provide this kind of security as proven by cryptocurrencies.

Furthermore, the speed at which we handle, prove ownership and trade with intellectual property can greatly be sped up by applying smart contracts to trade with digitised research assets. There are of course immense challenges to make this work alongside current IPR law and policies, but steps are already on the way. Companies are starting up in this area, one such example is Mattereum.

On the horizon, we can envision truly collaborative research projects where co-creation and recognised participants enable a community to reach bigger goals, perhaps funded and resourced by a mix of angel investors, pharma, biotech start-ups, patient organisations and private individuals who want to make a difference. In the wake of the marriage between open pharma research and blockchain, this will be possible – and it will be awesome!

The blog post reflects the author’s personal views.



Niclas Nilsson is the Head of Open Innovation at LEO Pharma, a pharmaceutical company in Denmark focusing on dermatology and inflammatory skin disease.


Niclas Nilsson will be discussing Incorporating Blockchain into a Pharma Model at the Blockchain in Healthcare Congress. Read the full agenda here

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