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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 56
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 57
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 58
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 59
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 60
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 61
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 62
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,
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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
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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
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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 66
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 67
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.
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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 69
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 70
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 71
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