Click for next page ( 56


The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement



Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 55
5 Organizational Structure of Contraceptive Development This chapter examines the roles played by the organizations involved in contraceptive development. We review the activities of government, universities, industry, and nonprofit organizations, evaluate how these groups interact, and discuss how organizational relationships affect contraceptive development. It is the sum of the actions of the full range of institutions in the contraceptive development field, together with the interdependencies of those actions, that determines the direction and pace of scientific research on new methods of contraception, the rate of new product development and marketing, and eventually the availability of contraceptive products throughout society. This chapter concentrates on contraceptive development efforts in the United States. It is important to note, however, that contraceptive research and development in other countries have been noteworthy. European drug companies and scientists have made important contributions to the field, as has the contraceptive research of several institutions in the developing world such as the Indian Council of Medical Research and scientists working at medical schools in Chile and Mexico. The World Health Organization's Special Programme of Research, Development, and Research Training in Human Reproduction, established in 1972, has also undertaken significant research and development activities and has helped coordinate the worldwide effort to promote contraceptive development Organizations involved in basic research, product development, clinical testing, and marketing of contraceptives constitute a heterogeneous mix of institutional types. There is a private-enterprise sector, which includes bow very large, multiproduct, multinational firms and a number of smaller firms with limited product lines. The large firms are vertically integrated, with major research 55

OCR for page 55
56 DEVELOPING HEW CO=~CE~~ES divisions, manufacturing operations, and marketing and distribution systems. Smaller fans typically are less fully integrated, choosing to purchase more services from others. Considerations of profitability lead private-sector fans not to concentrate their research on advancing basic scientific knowledge, for advances at this level are not typically patentable. Rather, large firms tend to support applied research leading directly to saleable products. The public sector has four implant, although often uncoordinated, roles in contraceptive development. First, it is the major source of funding, primarily through the National Institutes of Health, for the basic research in human reproduction that the private sector finds unprofitable but that is carried out by universities and nonprofit organizations. That research has potential social value in expanding fundamental scientific knowledge. The government also carries out basic scientific research itself at the National Institutes of Health. In both of these capacities, the public sector provides the financial resources to support research activities that cannot be expected to be financed solely by the private sector. From time to time the government takes on a second role in supporting activities usually left to the private sector. This is the case with contraceptive development for which the government provides direct support for product development through funding from the National Institutes of Health and the U.S. Agency for International Development. In this case, the government is responding to the perceived social need for additional contraceptive products and the fact that the private sector is not successfully undertaking the development work needed to produce those products. The public sector performs a third role when it regulates the development of new contraceptives by means of the activities of the Food and Drug Administration (see Chapter 7) or, through the legal system, provides a means to adjudicate disputes about the adverse consequences of contraceptive use (see Chapter 8~. Finally, the public sector also acts as a consumer when it purchases contraceptives for public programs in the United States (through He Department of Health and Human Services) and developing countries (through the Agency for International Development). Nonprofit organizations constitute another component of the contraceptive development field. Nonprofit organizations consist of foundations, which provide funding for research, the training of scientists, and other purposes, and operating organizations, such as the Population Council, Family Health International, the Program for Appropriate Technology in Health {PATTI), as well as universities and university-based programs such as the Contraceptive Research and Development Program (CONRAD) at Eastern Virginia Medical School. International organizations such as the World Health Organization and the World Bank are also active in the field. Similar to government, nonprofit and international organizations assist in financing activities that are unprofitable for private funs (though socially desirable3 and in carrying out those activities. Such work involves activities from basic research through He distribution of contraceptive information and devices. Nonprofit organizations supplement the role of

OCR for page 55
ORGANIZATIONAL STRUCTURE 57 government agencies, while avoiding many of the political and other constraints government faces. The organizational landscape of the contraceptive development field is shaped by attempts to deal with problems of funding, performing basic and applied research, and product development and marketing. Contraceptive innovation requires very sophisticated scientific research and product development and, as a consequence, is very expensive. Moreover, a significant proportion of consumers cannot afford all the costs involved in developing and supplying contraceptive products. Nevertheless, there are strong societal interests in broad access to contraceptives. Serving these societal interests involves some activities that bring clear, private benefits to consumers who have adequate ability to pay, similar benefits to other users whose ability to pay is extremely limited, and societal benefits (for example, from basic research and applied product development). This complex reward structure has resulted in different types of organizations becoming active in the field. Each element in the organizational structure typically performs a distinct role. An organization's environment, particularly the incentive structure to which each type of organization responds, is as important as internal organizational characteristics in determining how, and how well, its role will be performed. Private firms, for example, can be expected to meet societal needs only when their expected financial rewards exceed all costs- including those associated with research, product development, meeting regulatory standards, incurring product liability losses, and so on. Anything that decreases profitability will reduce the role of the private sector. Anything that decreases profitability for large firms while increasing it for smaller firms will affect the size distribution of firms engaged in contraceptive-related activities. Likewise, whatever the motivation of the individuals' working there may be to serve social and humanitarian goals, nonprofit organizations, including universities, can be expected to be successful only insofar as they obtain funds from individuals, private foundations, or government. Anything that reduces or limits federal government and foundation support will lessen the involvement of the nonprofit organizations in contraceptive development activities. A DIVERSITY OF EXPERTISE The development and successful introduction of a new contraceptive require a wide variety of expertise-from a knowledge of the cutting edge of biomedical science to an ability to master and comply with complex regulatory requirements. Contraceptive development and introduction also require a pool of highly skilled personnel and a large amount of capital. To be successful, a large number of scientific, legal, financial, manufacturing, and marketing activities must be carried out and managed simultaneously. Many organizational structures could accomplish the required tasks from basic research to postmarketing surveillance. In fact, a variety of organizations of

OCR for page 55
58 DEVELOPING NEW CO=RACE~IVES different types, sizes, and complexity with a wide spectrum of personnel and missions have been involved in the development and marketing of new contraceptives. The kinds of organizations that have dominated different tasks have changed over time. Why large pharmaceutical companies, nonprofit organizations, government agencies, and intergovernmental bodies entered or left a particular arena frequently cannot be fully documented. But it is possible to sketch the organizational structure of the contraceptive development field over time and to assess its impact on the development of new technology. Since the late 1960s the participation of the private sector in contraceptive development has diminished in the United States. The decline in private-sector involvement, as well as increases in funding from the National Institutes of Health and the Agency for International Development, has meant growth in the role of the public sector and of nonprofit organizations, including universities. Government funding for research in reproductive biology and contraceptive development increased substantially between 1973 and 1987, while investments in contraceptive- related research and development by major drug companies declined substantially, although the precise change is impossible to specify. As a result of these changing patterns of funding and research, a small number of private nonprofit organizations have become major forces in contraceptive development. Only large pharmaceutical firms are capable of undertaking all aspects of the development and marketing of new methods on their own. Smaller organizations typically specialize in particular activities or stages of the development process. One group may be most involved with a particular type of research or with the development of a product concept for a new contraceptive method; another may fund research and development activities; others specialize in biological evaluation, engineering design, or toxicological or clinical testing; still others concentrate on clinical trials of new methods, application for regulatory approval, or the introduction of the new technology. Just as a variety of organizations are involved in research and development efforts, so too are several different organizational types providing funding for the development of new methods. The Center for Population Research at the National Institute of Child Health and Human Development and the Office of Population at the Agency for International Development are the two major sources of federal government support for contraceptive development. The Rockefeller and Andrew W. Mellon foundations are the major foundations providing support for contraceptive research and development. The funding of contraceptive development is discussed in detail in Chapter 6. In an appendix to this chapter, we list the organizations that are currently involved in contraceptive research and development in the United States. The appendix includes U.S. government agencies, private firms, foundations, nonprofit organizations, universities, and international organizations that are currently supporting contraceptive research and development activities. Because information on research and development activities and expenditures is proprietary and so many organizations do not release it, the appendix is not as complete as we would

OCR for page 55
ORGANIZATIONAL PROCURE 59 like. Nevertheless, the available data provide a clear sense of both the range of organizations active in the field and the range of potential products being studied. In the sections that follow we describe the major types of organizations involved in contraceptive development. In addition to two federal agencies, NIH and AID, and one large pharmaceutical firm, Ortho Pharmaceutical Corp., more than a dozen private companies of different sizes, from very small to multimillion dollar, are conducting contraceptive development activities. Also actively trying to develop new contraceptive technology are nonprofit organizations. Three large European pharmaceutical firms and the Human Reproduction Programme of the World Health Organization are also involved in a range of contraceptive development activities. These organizations are working on products ranging from improved condoms to antipregnancy vaccines, including all the potential innovations described in Chapter 3. The Pharmaceutical Industry Over the past three decades, at least nine large U.S. pharmaceutical companies have been involved in research and development of new contraceptives. By the mid-1980s, however, only Ortho Pharmaceutical Corp. (a subsidiary of Johnson & Johnson) continued a significant contraceptive research and development program. In Europe, three companies, Organon International, Schering AG, and Roussel-Uclaf (a subsidiary of Hoechst Pharmaceuticals), have significant in- house contraceptive research and development programs. The U.S. companies that have for all practical purposes abandoned significant efforts on new contraceptive research include Syntex Laboratories, Inc.; G.D. Searle & Co.; Parke-Davis & Co.; Merck, Sharp & Dohme Co.; the Upjohn Company; Mead Johnson; Wyeth-Ayerst Laboratories; and Eli Lilly and Company (Djerassi, 1989, and personal communication to the committee). Whether any of these companies will resume research aimed at developing new contraceptives for the American market is uncertain, but it seems to be increasingly unlikely in the near future. Companies must make difficult decisions about which areas of research are most likely to provide a satisfactory return on investment and ensure corporate growth. These decisions are affected by market trends, by the possibility of achieving significant advances leading to new patent-protected products meeting consumer needs, and by a company's history and place in the market. Managers must also take into account the often significant opportunity costs when selecting new products to develop. All the large pharmaceutical companies previously involved in contraceptive development have product lines in areas unrelated to fertility regulation. Research and development funds have increasingly been allocated to these other less controversial and potentially more profitable products. The development of a new product entails large fixed costs that must be covered regardless of the size of the potential market Consequently, large pharmaceutical companies are interested in developing new products primarily for sizable markets, for example, those with potential sales of approximately $50

OCR for page 55
60 DEVELOPING NEW CO=~CE~~ES million or more annually. Except for the pill and condoms, most contraceptive products have smaller markets than that. For example, in 1984 IUD sales in the United States were estimated to be less than $30 million dollars. Some pharmaceutical industry experts see little prospect for significant advances in new contraceptive methods likely to serve a large market in the United States and, therefore, to generate a substantial profit. Some executives atlarge drug companies do not believe that the relatively small markets they see for most of the proposed contraceptive innovations justify the substantial costs that would be required to develop the new products, and they want to avoid the liability risks and controversy associated with contraceptive products. Public-sector funding and the increased activity of nonprofit groups and small entrepreneurial firms to some extent have substituted for the contraceptive-related research and development once performed by the large pharmaceutical firms. The growth of new research centers represents an important adjustment to declining pharmaceutical industry support for contraceptive research. Indeed, although increased involvement from large pharmaceutical companies would surely have an effect, that effect might not be immediately evident because of the relatively long time it takes before research leads to new products. However, because large pharmaceutical firms would have greater experience and more resources to evaluate, produce, and market products once they were available, the return of large companies might indeed increase the speed with which new products are introduced into widespread use. Small Firms With the decline in the number of large pharmaceutical companies involved in contraceptive development, there has been an increase in the number of small feds and R&D companies active in the field. Between 1970 and 1985, at least a dozen small companies became involved in the development of new contraceptives. One of the most successful of these companies was VLI Corp., which was established in 1976 and developed and marketed the Today contraceptive sponge. (The company has since been sold to Whitehall Laboratories, a division of American Home Products.) Most of these small companies rely on a combination of public and private sources to fund their research and development. A few depend entirely on government contracts and grants, while others fund their activities based on licensing agreements with large drug companies. Stolle Research and Development Corporation is a particularly interesting example of the complex network that contraceptive development firms use to support their work. For its research on a 90-day injectable contraceptive, Stolle is collaborating with both Ortho Pharmaceutical Corp. and Family Health International. At the same time, the company is being funded through the AID- supported Contraceptive Research and Development Program at Eastern Virginia Medical School, to conduct research on a 30-day injectable contraceptive for women, a 90-day injectable contraceptive for men, and a 90-day injectable

OCR for page 55
ORGANIZATIONAL STRUM 61 contraceptive microsphere for breastfeeding women. In conjunction with a project it supports at Ohio State University, WHO is funding Stolle to develop a one-year injectable vaccine for women. Some of these products will be licensed through Ortho Pharmaceutical Corp. or other large companies. Stolle does not plan to be directly involved in the marketing of products it develops. GynoPharma, Inc., which was formed in 1984, is another small firm that is marketing and introducing new contraceptive products, such as the ParaGard copper IUD, which it introduced to the U.S. market in 1988. Unlike Stolle and GynoPharma, which work with a variety of partners to develop a range of products, many smaller contraceptive R&D companies are trying to develop a single technology that they hope to license to a large firm for marketing. For example, Endocon is working on biodegradable pellets. Small firms like VLI Corp., which developed the contraceptive sponge, may occasionally manufacture their products and, as happened with VLI, small firms with successful products may eventually be bought by large firms. Whether working on a single product or on several products, most small firms are pursuing new methods for niche markets in the United States, although executives of these firms often believe their products, if successfully developed, could serve a mass market in the United States or abroad. In addition, as the data in the appendix show, with government or foundation funding, some small firms are also working on methods appropriate for less developed countries. Because small firms have fewer products and have usually invested a great deal of time, money, and research effort into the products they develop, they are more willing to risk the liability and possible adverse publicity associated with contraceptives than many of the larger, more diversified pharmaceutical companies, which stand to lose more financially if there is a public outcry against one of their products. Companies such as Watson Laboratories and Lexis Pharmaceuticals Inc., which produce generic drugs, have also entered the contraceptive business, but their primary goal is to produce generic oral contraceptives rather than to develop new technology. However, one firm, Gynex Inc., which is marketing a generic oral contraceptive and other generic products, hopes to develop a contraceptive administered sublingually (corporate information memorandum, Gynex Inc., April 19, 1988). Universities Scientists at more than two dozen U.S. universities currently conduct applied research on potential new contraceptive methods with funds from NIH:, AID (administered by the CONRAD program), and private foundations. In addition, special programs at a few universities have assumed responsibility for coordinating studies being carried out elsewhere; thus they serve as intermediary funders by providing support to researchers at other universities who become, in effect, grantees of the first university. This is the case with AID-funded programs at Eastern Virginia Medical School (CONRAD) and Georgetown University

OCR for page 55
62 DEVELOPING NEW CO==CE~WES (IISNFP3, and previously it was the case at the Program for Applied Research in Fertility Regulation (PARER) at Northwestem University. All these programs were funded by AID to conduct in-house research and to fund research done by others. University scientists are a vital link in the chain of contraceptive development activities. All the organizations involved in the development of new fertility control technology depend in some way on the expertise of university-based scientists. They are a source of ideas and product concepts, and they frequently assist in evaluating new technology. There are, however, a range of potential conflicts among university scientists and corporate and nonprofit executives that limit the opportunities for successful long-term collaboration. University scientists typically focus on basic research on biological processes and the publication of their results in scientific journals, not on applied research and product development. It is advances in basic research that bring them prestige and financial support. Such scientists may resist the limits imposed on their freedom to study whatever they wish, using whatever methods they prefer, when they participate in collaborative efforts in contraceptive development. Some collaborative arrangements with industry may also require a level of secrecy, which university-based scientists may find difficult to accept. Although the steadily increasing bureaucratization of university research has narrowed the differences between the norms of university and industry researchers, differences still exist that may limit effective collaboration. Nonprofit Organizations Although nonprofit organizations lack the capital as well as the technical and drug development expertise found in the largest for-profit companies, they are playing an increasingly important role in developing new contraceptive products and bringing them to market. To some extent, the cluster of donor agencies and - nonprofit organizations working with university scientists and clinical researchers in the United States and abroad offers a functional equivalent of a large drug company, although some important gaps still exist in the ability of these groups to develop and market new products. The Population Council and Family Health International 0;Hp are the most important nonprofit organizations involved in contraceptive research and development in the United States. Together they spend more than $10 million annually studying new contraceptive products (Family Health International, 1988; Population Council, 1988; U.S. Agency for International Development, 1989~. The mission of these organizations is to meet a social need rather than to make a profit. The research they support is oriented toward contraceptive products for developing countries and emphasizes products that try to better meet users' needs, including the needs of special groups, even if the particular product may be only marginally profitable. The nonprofit research organizations rely primarily on the federal government,

OCR for page 55
ORGANIZATIONAL STRUCTURE 63 and to a lesser extent on foundations and occasionally on industry, for funding. They depend on drug and device manufacturers to mass produce the products they develop. Nonprofit organizations, such as the Population Council and FfII, perform a wide variety of tasks related to the development process. However, the specific tasks vary depending on the organization. The program of the Population Council is the most comprehensive. It has its own research laboratories and animal facility on the campus of Rockefeller University in New York City, where it conducts basic research of a type not undertaken by other nonprofit groups. It also tests the new products it develops in the clinics of the International Committee for Contraception Research and registers those products for use throughout the world. Fen concentrates on the coordination of clinical evaluations of promising new contraceptive innovations initially developed by others. In some ways, FHI functions as a general contractor, coordinating the work of other specialists and groups. The Population Council and FHI work closely together on some projects. FHI is, for example, supporting some Phase III clinical trials of NORPLANT~ contraceptive implants originally developed by the Population Council. The activities of nonprofit organizations do not end with the development of a new method. The Population Council and Family Health International have both devoted some attention to introducing new methods. In addition, PATH, the Seattle-based nonprofit Program for Appropriate Technology in Health, was established in 1975 to facilitate the introduction of new and existing contraceptive technology in developing countries. PATH has assisted the Population Council and the World Health Organization in efforts to introduce new contraceptive technologies developed under their auspices. The Association for Voluntary Surgical Contraception as well as several Planned Parenthood affiliates are also among those who have helped to introduce new methods in specific circumstances. Avenues to transfer the knowledge gained from contraceptive research to specialty companies or large pharmaceutical firms in order that they can market new contraceptive products need to be developed further. Links between contraceptive development and marketing are especially weak. There are examples of for-profit (VLI and the Today contraceptive sponge) and nonprofit (the Population Council and the NORPLANT~ contraceptive implant) organizations successfully developing new contraceptives. But the development of these products, while driven by particular organizations, also required the collaboration of government, nonprofit groups, and for-profit institutions for successful manufacturing, distribution, and marketing. As nonprofit organizations become more involved in contraceptive development, they face transition problems. An illustration is provided by the development of NORPLANT@. It was almost 20 years after the NOR PLANT concept was first proposed that the Population Council, which originated the technology, filed for FDA approval. A large pharmaceutical company that routinely processes a number of new drug applications would probably have been better equipped to complete the regulatory requirements associated with a new product in a more

OCR for page 55
64 DEVELOPING NEW CO=RACE~~ES timely manner. Nonprofit organizations will continue to need considerable financial, personnel, and technical resources to successfully develop new products, in part because there is an organizational learning curve that means new organizational actors need time to master the tasks involved in the development process. After the completion of early clinical tests, the Population Council looked for a company to manufacture the NOR PLANT system. Leiras Pharmaceuticals in Finland was approached and agreed to manufacture NORPLANT@. Wyeth Laboratories, the pharmaceutical company that holds the patent on levonorgestrel, the active ingredient in NORPLANT@, had assisted the Population Council in making its NDA submission to the FDA by providing access to clinical and toxicological data on levonorgestrel; although Wyeth had what amounted to the right of first refusal on manufacturing, it agreed to the Leiras arrangement. Wyeth holds the rights to market NOR PLANT in the United States and, pending the outcome of the complete FDA review and the results of the company's marketing surveys, it may exercise those rights. However, until the product was favorably recommended by an FDA advisory committee in April 1989, Wyeth's plans for marketing NORPLANT~ were not widely known. Also important is the problem some nonprofit organizations apparently have in recruiting high~uality scientific staff. These groups are at a particular disadvantage because they cannot offer their employees the financial rewards that industry can provide, nor can they offer the prestige, freedom, and security that university appointments provide. The problems nonprofit organizations have in attracting scientists are compounded by the short-term nature of most of their funding. These circumstances have led a mission-oriented federal agency like AID to rely on a funding arrangement such as CONRAD, which provides a mechanism for involving university-based scientists in the agency's contraceptive development program. Several contraceptive products currently being developed commercially in the United States and Europe, such as copper IUDs and contraceptive implants, were originally investigated by nonprofit organizations. The drug companies that are now developing these products have become involved in part because the costs of much of the needed research have already been paid. The companies have an opportunity to earn a larger return than if they had had to pay for all the development costs. As long as the nonprofit sector is successfully completing much of the needed research, demonstrating the feasibility as well as the safety and probable appeal of new product concepts, and making this information publicly available, for-profit organizations are better off waiting for these results and then developing and marketing the most promising innovations. Government and Private Funding Organizations Through the funding of contraceptive research and development, the government and private foundations exercise considerable influence. (Chapter 6 discusses the

OCR for page 55
ORGANIZATIONAL STRUCTURE 65 funding provided by federal agencies and private organizations.) There are differences in what each group will support, based largely on the organization's goals and its particular history. The National Institutes of Health are oriented toward needs in the United States, while the Agency for International Development is eager to find a new technology that would serve the needs of the developing world better than existing products. Clearly, however, there is substantial overlap in these needs. NIH provides a much larger proportion of its support for basic research than AID, whose program is focused almost exclusively on applied research to develop new methods. Increasingly, however, AID and NIH provide support for the same people working on the same technologies. The Ford, Rockefeller, and Andrew W. Mellon foundations have also been important sources of support for contraceptive development. Ford, however, withdrew from the field in 1983 and is unlikely to return. Both the Mellon and Rockefeller foundations have recently appointed new presidents, and at this writing are evaluating their programs and a range of new opportunities. At this stage, the level of future support for contraceptive development from these foundations is not clear. From the viewpoint of those in the contraceptive development field, the support provided by the Ford, Rockefeller, and Mellon foundations has been particularly important because it has given researchers the flexibility to pursue new leads in a way that government support would not allow. For a time in the late 1970s, for example, researchers were not allowed to use AID money for collaborative contraceptive research projects in Chile, despite the international renown of Chilean contraceptive researchers; during that time, foundations provided funds that could be used to support collaborative work in Chile. The World Health Organization The World Health Organization is involved in the contraceptive development process mainly through the Special Program me in Research, Development, and Research Training in Human Reproduction (HRP). It is administered by WH[O and cosponsored by WHO, the United Nations Development Programme (UNDP), the United Nations Fund for Population Activities (UNFPA), and the World Bank. HRP is actively involved in the development of new contraceptives and, through its method-related task forces, plays an important role in all phases of the development process, from preclinical research to introductory trials of newly developed products. HRP also helps strengthen research resources in less developed countries by providing financial and technical support for research institutions and for training in herds related to human reproduction. In addition, HRP issues guidelines for the clinical testing of new contraceptives, sponsors workshops on the safety of new drugs, and assists countries wishing to establish postmarketing surveillance systems for new contraceptives. HRP provides support to numerous clinical and research establishments, collaborates with clinical investigators in the United States and many other developed and developing countries in studying

OCR for page 55
66 DEVELOPING NEW CO=~CE~~ES new contraceptive technologies, and works with government regulatory agencies, pharmaceutical funs, and nonprofit organizations involved in contraceptive development. Although the United States is a member of WHO, and U.S. scientists have for years worked closely with HRP, the United States has provided direct financial support to HRP for only two years since it was founded in 1972. Two products, a new monthly injectable and a vaginal ring, have been developed under HRP auspices, and introductory trials of these products has begun in several developing countries. HRP is working closely with the nonprofit organization, PATH, which is helping WHO introduce these new contraceptives into developing country family planning programs, working with local pharmaceutical companies, drug regulatory officials, government policy makers, donor agencies, family planning program managers, clinicians, and potential users. COLLABORATIVE EFFORTS IN CONTRACEPTIVE DEVELOPMENT International and national organizations, including universities, nonprofit groups, and commercial firms, are increasingly collaborating on specific contraceptive development projects. Collaborative relationships link public and private organizations, funding agencies, basic research facilities, university-based scientists, clinical trials organizations, and large and small pharmaceutical companies. The departure of a number of large pharmaceutical companies from contraceptive research and development activities in the United States increased the need for more collaborative efforts among the various organizations remaining in the field. Such collaborative efforts have also increased in recent years in part in an effort to reduce the costs and accelerate the pace of development. In many instances, collaboration is also a practical necessity because no one organization can successfully carry out the variety of tasks required to discover, develop, test, obtain approval for, and market a new contraceptive product. There are several examples of collaboration in the development and introduction of new contraceptive methods. Development of the Today contraceptive sponge involved the developer, VLI Coop., two federal agencies, AID and NIH, which supported the nonprofit group PHI to evaluate the sponge by private physicians and clinics across the country and at several sites abroad. Development of injectable microspheres has involved AID and NIH, Ortho Pharmaceutical Corp., WHO, CONRAD, PHI, and Stolle Research and Development Corporation. The development, testing, and introduction of the NOR PLANT contraceptive implant has involved the Population Council, FlII, PATH, Wyeth-Ayerst Laboratories, and Leiras Pharmaceuticals, together with numerous individual clinical researchers around the world. The work was funded by AID, the International Development Research Centre of Canada, the Rockefeller Foundation, and several other sources. Ortho Pharmaceutical Corp. has supported basic research on inhibin at the University of Maryland at Baltimore. Ortho has also supported research on LHRH analogues at the Salk Institute and at Stolle Research and Development

OCR for page 55
ORCANIZATION~ STRUCTURE 67 Corporation. In 1989 the Population Council joined with the private Vastech Medical Products, Inc., to develop a new nonsurgical vasectomy device. In most of these collaborative efforts, each organization involved plays a distinct role, performing a separate function or carrying out a particular phase of development (see Atkinson et al., 1985~. In other cases, however, because of funding constraints and existing institutional relationships, No organizations may conduct or support the same type of activity in different countries. To be efficient and successful, collaborative efforts require careful planning, communication, and coordination. Financial, legal, scientific, medical, and regulatory issues and responsibilities need to be clearly defined. Management and funding problems, inadequate planning, and work delays within one organization can have a compounding effect, slowing the entire development process and adding to the costs of development. Delays in the introduction of NORPLANT@, for example, have resulted from such a combination of problems, including a lack of coordination between organizations and funding, regulatory, and product design problems. Industry-University Collaboration University scientists conducting basic research in biomedical laboratories funded mostly by the federal government often recognize the commercial potential of their studies of reproductive biology and fertility regulation, but they lack the resources needed to develop these ideas and to market innovations. Pharmaceutical companies, by contrast, have the needed resources and are almost always on the lookout for discoveries with commercial potential. This common set of interests often leads to university-industry collaboration. The relationships that have evolved between pharmaceutical corporations and universities are as diverse as the individuals and institutions involved. Collaboration may involve the hiring of one consultant from a university by a particular company (or vice versa), or it may involve several universities and one or more companies working closely together on a project. It is impossible to determine exactly how much money the pharmaceutical industry provides to universities for contraceptive research and development. With the abandonment of contraceptive R&D efforts by most pharmaceutical companies, industry's support of university-based research on new contraceptives has almost certainly declined in real terms. However, precise data on trends in this area are not available. Despite problems, such as disputes over the granting of patent rights, the advantages of university-industry collaboration appear to outweigh the disadvantages. Universities' greater flexibility permits researchers to pursue interests that industry cannot support Industry benefits from the discoveries generated from this research and from the expertise of highly trained university scientists.

OCR for page 55
68 DEVELOPING NEW CO=~CE~IVES Competitive Aspects of Contraceptive Development The foundation of a pharmaceutical company's competitive advantage is that company's ability to discover and market new and useful products. The quest for innovative products is spurred by the potential demand for such products and, thus, the product's potential profitability. Some contraceptive products, such as oral contraceptives, have been very profitable, both in terms of a company's income and individual scientists' reputations. The competition characteristic of the drug industry leads to a great deal of secrecy about R&D efforts. The protection offered by trade secrets, the patent system, and market exclusivity rights makes secrecy essential in maintaining a competitive advantage. However, this need for secrecy also discourages collaboration and the open exchange of information on new discoveries. Time is another important factor in one company's ability to maintain a competitive edge over other companies. The company that gets a patent, FDA approval, or a product on the market first has a significant advantage in making a profit. Because many executives fear collaboration will slow development, they opt for doing as much of the research and development as possible within the company itself. Competition also exists among small firms, nonprofit organizations, and scientists involved in contraceptive development. This competition involves efforts to secure the limited public and foundation funds available for contraceptive development and for the financial and professional rewards derived from new discoveries, published results, and patented products. The scientists and organization executives involved in contraceptive development must contend with conflicting goals. On one hand, they want and need successful collaborative relationships. On the other hand, they must frequently act in a way that threatens collaboration. They want to take credit for as many achievements as possible and reject association with as many problems as possible in order to ensure continued, ideally increasing, financial support and scientific recognition. This is not, of course, an uncommon problem in science, but it does make cordial long-term relationships difficult. International Collaboration Contraceptive development programs funded by national governments, such as those supported by NIH in the United States or by the national medical research councils in Europe, tend to focus on national needs and to support research conducted within the country. Research programs funded by WHO, by foreign assistance agencies such as AID, and by private foundations tend to be multicountry enterprises. International funding gives researchers the advantage of being able to work in countries with different legal and regulatory customs as well as with different research resources and different family planning environments. International collaboration may result in the development of a more diverse range

OCR for page 55
ORGANIZATIONAL STRUCTURE 69 of contraceptives at a faster pace than would be possible if research were conducted only within a specific country (Bardin, 1987~. STRENGTHENING THE PROCESS OF CONTRACEPTIVE DEVELOPMENT Developing Country Institutions Despite their more limited financial and technological resources, scientists in several developing countnes, among them China, India, and Chile, have contributed to the development of new fertility regulating methods. Greep (1979), Kessler (1983), Free et al. (1983), and Segal (1987) have argued that developing countries could play a larger role in contraceptive development. Such a role would require that developing countries obtain additional financial and technical resources including laboratories, equipment, and doctorate-level scientists. Scientists in less developed countries may be able to pursue contraceptive innovations that would more adequately meet the needs of people in those countries (Greep, 1979~. Conducting contraceptive research in developing countries has the advantage that the testing of new products is done under the social and medical conditions and in the populations in which these new technologies would be used. Ethnic and geographic differences in users' reactions to new contraceptives, as well as the interaction of contraceptive products with diseases endemic to specific areas, demonstrate the utility of developing and testing new contraceptives in a variety of both developed and developing country settings (Adadevoh, 1983~. Over 60 clinical and research organizations in developing countries have already received institutional support from the World Health Organization's Special Programme of Research, Development, and Research Training in Human Reproduction (Adadevoh, 1983~. Through collaborative research grants and contracts, Family Health International and the Population Council have also contributed to the support of scientists active in contraceptive research in developing countries. The Population Council has also provided fellowships for graduate training in fields related to contraceptive development. These efforts have helped many developing country institutions gain greater self-reliance, better research facilities, and an improved ability to conduct research (Adadevoh, 1983~. Although external technical and financial assistance is important, a national commitment to contraceptive R&D efforts is also essential to ensure a successful long-term development program. Government policies create the legal, regulatory, and economic environment that hinders or enhances contraceptive development efforts by private industry or by publicly supported groups. India, for example, has recently made changes in policy that should help to encourage collaborative efforts in contraceptive development and the local production of contraceptives (Program for Applied Technology and Health, 1988~. Other countries could benefit from following India's example.

OCR for page 55
70 DEVELOPING NEW CO=RACE^~ES National Scientific Centers in the United States In his 1987 State of the Union Address, President Reagan proposed the establishment of science and technology centers by federal research agencies; the National Science Foundation (NSF) began to support such centers in 1988. To help to integrate this new program with the NSF's existing current research programs, the President proposed substantial increases in the NSF budget. Some people believe that the establishment of a national center for research on human reproduction and contraceptive development supported under the sciences and technology centers program could be an important change in the current organizational arrangements in the field of contraceptive development. In 1984 Congressman Jim Moody introduced a bill (H.R. 5335) to establish a National Institute on Population and Human Reproduction. However, given the successful collaboration already under way among contraceptive developers and clinical researchers, a more fruitful approach may be to strengthen the already functioning Contraceptive Development Branch of the Center for Population Research at the National Institute of Child Health and Human Development rather than establish either a new national center for research on human reproduction and contraceptive development or a new NIH institute. CONCLUSION The organization of contraceptive research and development in the United States has changed dramatically over the past two decades. In the early 1960s, most contraceptive research and development activities were sponsored and carried out by large pharmaceutical companies. By the 1980s, the government, small single-purpose companies, and nonprofit organizations had taken over most of the contraceptive-related research conducted in the United States. Increased government funding of contraceptive development in the early 1970s meant an expansion of the role of the public sector. Because most donors are particularly interested in research likely to have an impact in the developing world, research and development is increasingly being carried out by universities and nonprofit organizations that have strong international networks. For the foreseeable future, much, perhaps most, of the cost of contraceptive research and method development will continue to be borne by government and private foundations. New contraceptive breakthroughs will require that universities and nonprofit organizations continue their development efforts. This may create temporary inefficiencies, delays, and added costs as these groups master the skills required to successfully develop and introduce new contraceptive products. Although most large pharmaceutical companies no longer see contraceptive development as sufficiently profitable, ways should be sought to increase collaboration between the pharmaceutical industry and the other organizations that remain active in the field.

OCR for page 55
71 P4 If ct o - o ;` In so o ~= ct ~ - be o v) ~3 En he a) - .F :3 .e a! oD ~ - o z . - .e of of o En i ~Hi 7~ 5 ti it. ~ i m a: ~:z z ~,_ 0~ as m ~ V, ~_ i -, i . ~i ~ 5 ~ 6. ~0 0 As z ~cry cry us ~PA u' c' _ ~E ~ C ~ c o o =.S C) Z he ~

OCR for page 55
72 cat c, .Z .S .~ to o G) co an - u~ ~3 X he .1 .e ~0 00 o ;- o ~O 6 4,, 5 50 ~ .S ._ =, Go S ~.S O .S Z; ~ .- - .= I'm a, . _ L' E :~ . .> ~ =m A= =0 8.=; ~ ~ c 0 ~ i 5 ~ =a ~ a , 5 ~5 ~ = , 6 5 ~ = i A "C ~ ~._ . ~ O O 9 2 c3~ ~ ~ 3 A. i, ~ i , :~3 u, A ._ ~7 .= ,_ ~ > ~ ~o ~ u) -

OCR for page 55
73 tic us us :- := ~s s .;: ~ ~al ' ' ' ' " ~ ' ~ 2 e So ' ' . 2 E E E E a ~ ~ ~ ~ ~ ~ ~3 ~ ~su ~ :7 3 E ~ ~ b~ ~ ~i ~ ~5 . 5i 2 e 5 e ~z ~A' ~k 6 0 z z

OCR for page 55
74 C'3 C) By - .Z o o I_ o C) :, ~ - o V _. U) X At C Cq ..._ U} a =.= - ~ t4 ~ _ = CD ~ Cat .O ~ .- U) _ ~ ~c:-e ~ 8= ; O~ > ~ ~ ~ .- -! ( C ~ o CO C) I it, - o Cat _- Be. ~ 3 a, Z ,5 :- ~ ~ ~ c E C :3, 0 ~ ~ ~ C E ~ t - so ~0= :3 .i o o C) O J O O _ on t_ ~ > .S ~ ~ ~ ~ o ' ~ ~ ~ o ~ o ~ - o o ~o ~ o o ~ - o :~` ;- ~ o c ~ 5 4,, ~ Z o ~ .- 4) D ~ as D _ D ~ ~ 5 C~ ~ ~ ~ 3 cL .S ~ ~ ~ , ~ ' ~ ~ <~.S ~ ~ ~ ~q ~ ~ _ U) ~ ~ ~ a c ~ ~ @ := E :, ~ o 3 ~ .3 ~o ~ ~ ~ o ~ ~ ~ ~ - .5 o ~ a ~ ~ , 3 ~ ~ . U~ ~ o ~ ~ ~ ~ 3E S- ~ Z ~ ~ 3 5