Innovation in the Pharmaceutical Industry: The Process of Drug Discovery and Development - Innovation and Marketing in the Pharmaceutical Industry - page 19

Chapter 2
Innovation in the Pharmaceutical Industry:
The Process of Drug Discovery
and Development
Elina Petrova
Abstract Continuous innovation is one of the pharmaceutical industry's most
defi ning characteristics. New medications can be crucial for maintaining the quality
of human life, and may even affect its duration. The sales potential is staggering: the
global pharmaceutical market is expected to reach $1.1 trillion by 2015. The pres-
sure to succeed is tremendous. Yet, pharmaceutical innovation is hardly an orderly,
predictable process. It follows a technology-push model dependent on a meandering
path of scientifi c breakthroughs with uneven timing and hard to foresee outcomes.
Technological competency, decades of rigorous research, and profound understand-
ing of unmet customer needs, while necessary, may prove insuffi cient for market
success as the critical decision for commercialization remains outside the fi rm.
Drug innovation as a business process requires savvy strategic, organizational,
and managerial decisions. It is already enjoying intensive research coverage, giving
rise to abundant but relatively dispersed knowledge of the mechanisms driving
drug discovery and development. In this chapter, we present a comprehensive over-
view of the process of drug innovation from a business and academic perspective.
We discuss the evolving organizational forms and models for collaboration, sum-
marize signifi cant empirical regularities, and highlight differences in market positions
related to fi rms' strategic orientation, innovation emphasis, attitudes to risk, and
specialized resources. As a guide to future research, critical drivers and modes for
drug innovation are systematized in a unifying framework of characteristics and
process decisions, and multiple areas in need of further scrutiny, analysis, and opti-
mization are suggested. Because of its rich potential and high signifi cance, research
on drug innovation seems poised to gain increasing momentum in the years to come.
E. Petrova ( * )
Washington State University , Tri-Cities , WA , USA
e-mail: [e-mail]