The Pharmaceutical Industry: Specifi city, Challenges, and What You Can Learn from this Topic - Innovation and Marketing in the Pharmaceutical Industry - page 14

Ding, Dong, Eliashberg, and Gopalakrishnan provide defi nitions of portfolio
management, review relevant facts and evidence about the pharmaceutical industry, and
examine current portfolio management practices. They then probe deeper into specifi c
managerial issues within portfolio management in the pharmaceutical industry.
Betz, Camacho, Gerards, and Stremersch provide a detailed conceptualiza-
tion of grassroots, or bottom-up, innovation and show how it can be applied in the
pharmaceutical industry. They anchor their conceptualization in self-determination
theory. They describe principal drivers of motivation and success for employees in
pharmaceutical companies to come up with and develop innovative ideas into new
business lines. They share their experiences in developing innospire , a grassroots
innovation program at Merck KGaA, Darmstadt, Germany.
Wuyts' chapter focuses on three important issues: competing perspectives on
why fi rms benefi t from portfolio diversity; how the differences among fi rms in their
commitment of managerial resources to portfolio management and in their internal
R&D strategies can help explain why some fi rms benefi t more than others from
portfolio diversity; and why technological developments, such as the rise of nano-
technology and institutional developments like healthcare reforms, change the very
nature of collaboration and alliance portfolios in the pharmaceutical industry.
In their chapter, Chan, Narasimhan, and Xie address the innovation theme
through an evaluation of the effectiveness and side-effects experienced by fi rms in
the pharmaceutical industry as their innovative drug goes through clinical trials
data. They argue that there are several important issues that cannot be addressed
with clinical data alone and propose how researchers may benefi t by supplementing
such data with post-marketing prescription choice data.
Taking the perspective of the launch and diffusion decision chain, Landsman,
Verniers, and Stremersch provide a review of both the sequence of decisions that man-
agers must make, as well as the analytical tools pharmaceutical fi rms can use to improve
their decision making. The rich set of decisions includes decisions regarding the specifi c
methods for the assessment of a treatment's commercial potential, decisions aimed at
optimally extracting the new treatment's potential, and decisions regarding the strategy
that will be used to leverage the new treatment's potential across countries.
Kappe focuses on innovation strategies available for a drug that is already on the
market and is approaching its patent expiration. This scenario is of interest to differ-
ent parties: branded drugs/generic manufactures, physicians, patients, insurers,
pharmacists, and the government. This chapter focuses on the consequences of pat-
ent expiry for branded manufacturers, and discusses the regulatory environment for
prescription drugs, the determinants and impact of generic entry, and various life
cycle extension strategies.
The innovation section is concluded by Jain and Conley 's chapter. It summa-
rizes a broad list of patent extension and market exclusivity options and pricing of
pharmaceuticals both pre- and post-expiry, analyzes how promotional activities and
newer product branding actions such as advertising and product confi guration
impact the behavior of patients exposed to such innovations, and it closely examines
two distinctly different pharmaceutical cases: the markets for gastro-esophageal
refl ux disease and neurological medicines.