From FIPCO to FIPNET to VIPCO – Say What?

As alternate business models to the vertically integrated pharmaceutical company proliferate, acronyms flourish.  Let’s not worry about which came first, but let’s just consider what each of them means as there is some value in considering them all.  This post relies heavily on the following blog post by Janette Dixon on May 31st, 2010: which first clarified the differences.

Let’s start with the traditional model of the vertically integrated pharmaceutical company, which has lately been referred to as the fully integrated pharmaceutical company or FIPCO.  As noted in the previous section In-house vs. Out-source; Vertical Integration vs. Vertical Disintegration, as big biopharmaceutical companies move away from the traditional model they shed various core competencies.  In doing so, the need to fill the gaps through partnering, gives rise to a fully integrated pharmaceutical network or FIPNET.  One could argue that big biopharma have always engaged in this behavior, as has been noted in the following post –

Continuing in the vein of vertical disintegration/partnering, Figure 1, the fully disintegrated but vital company becomes a virtually integrated pharmaceutical company or VIPCO.

Figure 1, Vertical Disintegration from FIPCO to FIPNET to VIPCO

Dixon continues the catalogue of cleverness with respect to venture capital supported start-ups.  In this space, the companies are not likely to attract sufficient investment to form a FIPCO or FIPNET, and a VIPCO may be difficult to organize at the outset around a novel idea.

In this realm we have the research intensive pharmaceutical company, aka RIPCO, that starts with a novel drug target, target family or a platform technology.  And there is the corresponding No Research, Development Only start-up, or NRDO, that originates around an in-licensed drug candidate.  A successful RIPCO may add capabilities as the research ideas progress and the company evolves into the Fully Integrated Drug Discovery and Development Organization or FIDDO. These variants are shown in Figure 2.

Figure 2, From FIPCO to RIPCO, NRDO and FIDDO.

A FIDDO is not yet a FIPCO, but expects to partner or license the drug to a FIPCO or FIPNET for one or more of the final steps of manufacturing, licensing and marketing.

There will likely be additional acronyms created that fill the needs of different audiences.  For example, aren’t RIPCOs and NRDOs more often RIPNETs and NRDNETs?  And aren’t VIPCOs more often VRIPCOs and VNRDOs? Oy!