Pay-as-you-go strategies

Commercial pharmaceutical companies frequently use pay-as-you-go strategies. Examples include buying R8rD ideas from biotech companies ( external innovation ) and paying outside contractors to conduct experiments and cHnical trials. Some virtual pharma companies purchase almost all of their R8rD from outside vendors (see Maurer [2005] for a detailed description.)... 

Companies competing in an end-to-end system would presumably use these same strategies. The main difference between end-to-end and pay-as-you-go strategies Hes in who pockets the savings. 

To avoid the pitfalls of previous CRM projects, implementation should take three success factors into account a clear focus regarding CRM functions, customer channels, and analytic needs careful platform and provider selection and a pay-as-you-go strategy. 

To implement a CRM solution, companies need a dear focus on its functions, careful selection of both platform and provider, and a pay-as-you-go strategy. 

The final category of proposals consists of suggestions for hybridizing end-to-end, pay-as-you-go, and/or conventional patent incentives within a single strategy. Today s Private-Public Partnerships frequently use sponsor money to subsidize commercial R D programs when conventional patent incentives are thought to be inadequate (Pharmaceutical R D Policy Project 2005). 

Unlike end-to-end systems, pay-as-you-go systems place substantial decision-making and outsourcing responsibilities in the hands of sponsors. 1 begin by asking what incentive mechanisms a pay-as-you-go sponsor is likely to adopt. 1 then turn to potential problems that might make pay-as-you-go less efficient than comparably funded end-to-end strategies. 

Competition is a powerful constraint on manufacturing costs. Historically, sponsors have used contracts to purchase a fixed quantity of drugs as an incentive to build new manufacturing capacity. Examples include polio and, more recently, bird flu vaccine (Maurer 2005). Competition is also a powerful way to constrain manufacturing costs once production begins. By far the simplest strategy is for pay-as-you-go sponsors to put drug compounds in the public domain so that anyone can manufacture them. ... 

Thus far, I have assumed that pay-as-you-go and end-to-end strategies are distinct from each other as well as from conventional patent incentives. Here I ask how these distinctions can be relaxed to create mixed incentives. 

Lappe and Holm [108] used a computational strategy ( pay-as-you-go ) to exploit the scale-free property of networks representing biological systems to estimate that about 10,000 TAP-MS experiments would be enough to cover the full interactome. A rational design of these experiments by following known interactions was estimated to require four times fewer experiments than a pure random selection of the proteins used for the pull-down experiments. 

---