Here we examine the critical role of patent research for life sciences and pharmaceutical businesses - looking beyond the traditional use by R&D and legal departments, there is also significant value for functions including procurement and strategy.
The filing and studying of patents is nothing new among life sciences, pharma and healthcare companies. It is fundamental for firms in order to protect their technologies, earn a premium on their products, and gain a scientific and competitive edge.
However, there is also another important reason why businesses should look at patent research: for the value it can bring to their procurement and strategy-related decision making. Patent research can be a key tool for deriving insights into 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 where life sciences and pharma companies can find patent analysis particularly useful for adding value: innovation scouting, partner identification, sourcing strategy, and market exploration and category strategy. Below we explore these areas in more detail.
1. Innovation scouting
Patent research can add tremendous value for 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 companies 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
2. 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-generation DNA sequencing method for drug discovery and development. Patent research can help with identifying and choosing between two potential types of partner:
- 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 may have developed a precise system but would require the pharma company’s support and funds to test and refine it
3. Sourcing strategy
Companies can leverage patent research to get early signals about whether they need to change a supplier or a sourcing destination, or take additional steps to enable their suppliers to innovate. Here are some ways firms can leverage this insight:
- Tracking if a particular raw material is being disclosed in patents from a new geography/region, and if so, considering whether it makes sense to explore new suppliers or producers from that region
- Identifying innovative alternatives – such as a completely 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
- Reviewing the supplier base for procured products which are likely to get patent protection
4. Market exploration and category strategy
Keeping up to date with the latest trends and innovations in a market or category is one of the most (if not the most) important inputs for a life sciences company’s growth engine.
Companies can use patent research to achieve one or many of the following objectives:
- Assess whether their suppliers are working on/using new technologies, 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 regular insights into competitor activity
For instance, within the cancer treatment market, a recent focus is on gene-based therapy and CRISPR-Cas9 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 stay abreast of 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 a strategic tool they should embrace and apply across the whole organisation, including procurement and strategy functions, to derive value-adding business intelligence.
To learn more about how our proactive category insights, procurement intelligence, and regular patent and innovation updates could help your business stay ahead, please contact us.
We work with life sciences organisations across the spectrum and get to witness the ongoing transformations taking place. Here you can read our perspectives on what 2019 might have in store for the sector.