DIEPPE - British entrepreneurship guru Alan Barrell took a hot topic in Canadian policy - generic versus brand-name drugs - to spell out the benefits and challenges of introducing open innovation at a talk in Dieppe on Wednesday.
Fresh from meetings in Ottawa on spurring entrepreneurship in Canada, Barrell said the patent protection that big pharmaceutical firms covet for their name-brand drugs is going head-to-head with a push for fiscal restraint in Canada.
The federal government is considering loosening patent protection laws favouring Big Pharma to allow cheaper generic drugs to flow onto the market more freely, but there's a risk that firms such as GlaxoSmithKline Inc. (NYSE:GSK) could in turn threaten to pull research out of Canada, he said.
It's a battle that has led to less innovation in an important industry, Barrell said.
There's no easy answer to the problem, he said, adding it's a challenge federal assistant deputy minister for science and technology Rob Dunlop and the deputy British high commissioner to Canada, Martin Hill were eager to discuss with the British innovation expert earlier this week at a conference in the nation's capital, Innovation 2010, which was attended by some 700 international technology players.
"The Canadian situation regarding patent protection in the pharmaceutical industry is getting weaker for the research-based companies in favour of the Canadian generic companies, as a result of pressure on health spending in the provinces," said Barrell, an entrepreneur-in-residence at the University of Cambridge and an angel investor who has managed large and small firms within the medical and technology industries.
"It's all to do with the amount of money that has to be spent on generating new product, which might be 12 years before it gets to the market, which might cost many millions of dollars.
"And increasingly in the world, we see, because of technology, the ability of generic companies to move in with a slightly modified product and sell it at half the price."
Barrell spoke to approximately 40 technology sector players at an event hosted by Tech South East, a Moncton-based organization that aims to develop the information communications technology, health and life science sectors in southeast New Brunswick.
In contrast to the pharmaceutical sector example, Barrell said a health services company that conducts research in Barrell's hometown of Cambridge, Koninklijke Philips Electronics N.V. (known as Philips), is extraordinarily open.
The firm, which established a high-tech park in Eindhoven, Netherlands, that used to bear its name, removed its moniker from park's official title and eliminated restrictive security access requirements, opening up the park to some 50 companies that are now leveraging its expertise to grow in related industries.
As well, mobile phone technology giant Nokia announced recently it has loads of intellectual property it would like to donate to small companies prepared to take the ideas further, Barrell said.
"British Telecom has 14,000 unexploited patents," he said.
"We have companies that are spending vast amounts of money on research and I bet in Canada there are warehouses of intellectual property that somehow isn't getting developed into products," he said.
"Open innovation could make that a possibility."
Barrell referred to Cambridge as a success story in bringing together a university, the business community and government to promote entrepreneurship in the technology sector.
But when asked by the audience how southeast New Brunswick could do the same - attracting the likes of Nokia, Philips, Microsoft and other large firms that have a presence in the British community - Barrell didn't have a direct answer.
"You've got to attract some of that large-scale money into your system," he said, suggesting the region identify an expertise and sell it, potentially in gaming.
"You probably do need the engagement of one or two large companies to really build it big."
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