Biomedical Engineering Reference
In-Depth Information
with companies congregated in the Boston/Cambridge area; the San Francisco
Bay Area, San Diego, California; Princeton, New Jersey; Washington, D.C.,
metro area; as well as Philadelphia. In recent years the economic pressures
that forced the pharmaceutical industry to think differently about the sourcing
of many operational commodity services has driven a trend toward the emer-
gence of both large pharmaceutical and biotechnology footprints in emerging
markets such as Brazil, Russia, India, and China (the traditional BRIC coun-
tries) as well as Indonesia [2].
1.1.2
Brief History of Biotechnology
The biotechnology “revolution” began in earnest in 1976 with the founding of
Genentech. Inspired by similar movements over the past century in the semi-
conductor, computer, and advanced materials business, a business model was
adopted that would see science evolve from being a tool for the creation of
new products and services to being the business itself. Science would move
from being “outside” of the business to being the actual business. Genentech
was founded as the fi rst of a number of private fi rms that would monetize the
basic research process. Herbert Boyer, an academician, and Robert Swanson,
a venture capitalist, invested $500 each into a new business venture that would
seek practical uses for the engineered proteins being developed in Boyer's
laboratory [3]. Genentech remains one of the largest and most successful of
the biotech companies, posting revenues in 2008 in excess of $10 billion, and
is now wholly owned by Roche. The Genentech business model continues to
be cloned as academicians seek venture capital to advance their ideas and
blend science and business.
Despite the business success seen by some of the biotechnology companies,
the vast majority of the entrants into this fi eld failed. The business environ-
ment imagined (and required) by this new sector was one in which pharma-
ceutical (R&D) activities were organized through a web of collaborative
agreements between the traditional large pharmaceutical and newer biotech-
nology companies. This collaborative network was envisioned to dramatically
alter the industry and transform human health through improved products
and services. In reality, while the biotechnology sector has seen exponential
growth in revenues over the past 25 years, operational income has been fl at
or negative, and there has been no discernable difference in research and
development productivity as measured by new drug launches. However, the
biotechnology sector has contributed to the diversity of treatments in the
world's medicine chest. In 2008, 31 new medicines were launched, 10 of biolog-
ics (non-small-molecule) origin, the preferred modality of the biotechnology
sector [4] .
The promise of transformation of the health care industry brought about
by the emergence of “science business” biotechnology companies has failed
to materialize due to fundamental differences between the pharmaceutical
(R&D) business and the organizational models indiscriminately borrowed
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