Editorial Advisory Board Weighs in on Open Innovation

For this year’s pharmaceutical packaging roundtable, PMP News editor Daphne Allen asked members of its Editorial Advisory Board with extensive experience in pharmaceutical packaging what they thought about open innovation. PMP News was inspired by sister publication Packaging Digest, whose editorial director John Kalkowski wrote earlier this year, “Suddenly, it seems, open innovation has become a hot topic in packaging. At trade shows, conferences, and in conversation, companies are talking about the need to keep a steady stream of innovations flowing. The challenge, though, is how to achieve this when R&D budgets are being squeezed or simply can’t keep up with the demand for new products and packaging that have shorter and shorter life cycles.”

PMP News and Packaging Digest further explored the topic of open innovation at their “Meet the Press” event held November 1 during Pack Expo International 2010 as part of the Institute of Packaging Professionals’ Packaging Learning Center.

Providing input for our roundtable are John Bitner, director of packaging development, Watson Pharmaceuticals; D. Bruce Cohen, principal, PackTechPlus LLC; Rich Hollander, vice president, packaging services, Pfizer Inc. (who also participated in the Meet the Press event); and Stephen Hess, now retired from Merck and Co., Inc.

Do you think “open innovation” principles could work in pharmaceutical packaging? Do you know of any pharma companies employing open innovation or asking for it from packaging suppliers?

Hess: I certainly believe that open innovation has a role going forward. Many companies realize that the vast majority of innovation comes from the outside, and they can no longer look solely internally to R&D to furnish the innovation needed to be successful. There are many examples of pharma companies looking to partner with supply chain partners and suppliers to help innovate. Component suppliers often have ideas to help reduce cost of goods or improve the performance of a packaging line. Suppliers can also offer new perspectives from the outside that can help to improve manufacturers’ business processes. This could be as simple as assisting with the internal change control process that can sometimes be a difficult to maneuver and a barrier to innovation. Supply chain partners can also work with manufacturers to deliver more customer-focused packaging and delivery services to exceed customer expectations.

Hollander: Yes, but I think it needs to be focused open innovation. All innovation needs to start with some form of insight that you are trying to address with out-of-the-box thinking. Pfizer is pursuing open innovation with a major food company.

Bitner: There are a number of companies practicing open innovation, only it is called operational efficiency, component consolidation, improvement of patient compliance, implementing, and furthering sustainability. These strategies cannot be successful in isolation. I believe open innovation leaves a bad connotation. If open innovation refers to partnering with supply-side vendors rather than treating them as adversaries, that is admirable. If open innovation refers to awareness of evolving or new technology and recognizing application from other industries, that is not only worthwhile, but expected. To differentiate with purpose, not innovate for entrepreneurial dominance, is the new path of popularity.

Cohen: Generally speaking, most companies are looking for an “edge” to make their product/pack stand out from that of their competitors. Being on the “bleeding edge” of innovation will increase your costs and may take much longer than
anticipated. Your success rate will be lower, also. In the Rx world, certainly in past experiences, most patients do not see or receive the original package. Where innovation comes to the forefront, you usually have a very specific need for delivering medication directly to the patient. In the consumer products area, innovation and differentiation are the keys to market success. You could have essentially the same product as your competitor, but your delivery and ease of use could be superior. In today’s market, you need to have your products perceived as being sustainable, user friendly, assisting in patient compliance, and not overly costly. I would think today, you would be looking at other industries to see what you could use from somewhere else.
In my past experience, I always listened to the suppliers that had something new. Once in a while, someone would have something that just fit an existing product to enhance its patient interface or something new that would improve a new product for your launch. We would always ask if we could get some type of exclusivity for a product range or a class of product. This would allow us to get some edge for a specific period of time.  Most innovators want to be able to sell their technology to as many customers as possible. We developed a patented bottle for a specific need we had for a product line. The supplier we were working with started to receive inquiries from other companies about using our bottle. We agreed to let the supplier sell our bottle design to other companies if their products did not directly compete with our product. We were always looking for a better design for child-resistant closures. We agreed internally that if we were successful, we would open the use of the new cap to everyone.

What solutions could open innovation bring?

Hollander: Maybe none, maybe something big? At a minimum, we’re learning more about the technologies used in the food industry and they are learning about ours. The more we understand, the more we might be able to uncover as well.

Bitner: As pharmaceutical manufacturers we should know our business better than any supply side vendor. It is the bridging of expertise that breeds success. The vendor supposedly is expected to have that same level of expertise with the product or service provided. Properly focused that camaraderie would open productive opportunities.

Hess: The right combination of partners could be really powerful and offer a wide variety of solutions, especially if you look across the entire supply chain and focus on the patient.

The ones that come to mind immediately are reducing costs of goods, improving packaging performance, and adding value via the packaging.

More specifically, material suppliers could help manufacturers to identify, test, and implement less-expensive barrier materials for product packaging. Suppliers could also help to identify, test, and implement cold-chain packaging solutions that could allow us to maintain product quality and reduce shipping costs.

Suppliers could help manufacturers to develop and implement more customer-focused child-resistant adherence packaging that offers the protection needed as well and patient reminders that help patients take their medication properly so they receive the full benefit.

This list could go on.

What challenges would there be in implementing it?

Hollander: It would be a function of what it is and defining how we want to address any IP, for example, keep as a trade
secret, publish for public domain, or pursue patents. Further, as we are a highly regulated industry, we want to be smart with respect to how we approach regulatory hurdles so as to minimize
the amount of product stability testing required.

Hess: One particular challenge that needs to be addressed would be that of trust or ownership. Some suppliers may be reluctant to offer the best ideas for innovation without a true partnership or agreement with the manufacturer. The competitive nature of this industry poses challenges that need to be addressed.

Bitner: Management must be willing to take an educated risk, which comes with trust, credibility, and capability. There must be a common goal from top to bottom and freedom granted to those depended upon for implementation. The internal sell on both sides would be a tremendous challenge.

Would it strain relationships with suppliers or strengthen them?

Hollander: Yes, but in a good way. Our industry has not had many significant quantum-leap innovations in the 19 years
I’ve been in packaging. What I’d like to see is our component suppliers asking their customers for insights and then to focus their innovation efforts accordingly. Together, we get healthcare out of the “box” we’ve been working in with respect to both
package designs and technologies used to produce them.

Hess: I see innovation as a platform for forging stronger partnerships with strategic suppliers. If goals and objectives are clear and can be shared with suppliers and supply chain partners, we can all be more focused on delivering value.

Bitner: It would strengthen the relationship with a providing supplier, but weaken it with exclusivity among others. On one side exclusivity rewards ingenuity and willingness. However, if the focus is on taking the high road of value to patient, rhetorically speaking, should not everyone have equal access to that same technology, free of licensing fees, patents, inordinate cost, and extended exclusivities?

Any other thoughts about innovation in general?
 
Bitner: Again, I believe it is a misused icon. It reeks of increased cost. Awards for reward sake, not for the value within. We first need to educate at all levels. Just do it. May be an affective slogan for athletes, but far less convincing in the pharmaceutical industry. Value added differentiation builds relationships and increases market share. Too few are willing to take that step as it is far more difficult than innovation.
 
Cohen: There are a lot of smart folks that work outside of the Pharma Industry.  It should not be a problem to reach out to them and use some new technology that is available.