Biomedical Engineering Reference
In-Depth Information
and narrowing of their exploratory focus can free resources for obtaining greater
scientifi c and technological profi ciency and help develop unique experience and
expertise in a few therapeutic areas. The acquired in-depth knowledge and know-how
can still be shared with selected partners through various forms of collaboration and
controlled information exchanges so that functional synergies and cross-pollination
of ideas can occur.
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Large pharmaceutical fi rms seem particularly well-equipped to serve as expedi-
ent platforms to market. Owing to their vast scale of operations, professional net-
works, and experience, they are adept at designing and overseeing extensive clinical
trials, and can organize and conduct them faster. In addition, their sizable marketing
prowess and already established sales forces can ensure more effective end-product
commercialization. Researchers have already found empirical evidence in support
of this premise. For example, products developed in interfi rm partnerships turn out
to have a greater probability of success, particularly if the licensee is a large fi rm
(Danzon et al.
2005
).
In summary, the pharmaceutical industry seems to have embarked on a gradual
transformation away from the vertically integrated model with the strong block-
buster orientation. The emphasis is shifting to incremental innovations, greater spe-
cialization, and focused R&D in an effort to capitalize on established competencies,
realize greater effi ciencies, and benefi t from synergies. In turn, these tendencies
have brought about new business roles and practices that have supplanted the earlier
vertically integrated model of self-suffi cient fi rms with more distributed,
collaboration-intensive models. Public sector research institutions, large pharma-
ceutical fi rms, and small biotech ventures seem to have found a way to fl ourish side
by side and balance bouts of rivalry with forms of interdependency and collabora-
tion. We examine these forms next.
2.3.4
Modes of Collaboration for Innovation
in the Pharmaceutical Industry
The high stakes associated with exclusivity rights, unpredictable outcomes, fi erce
competition, and fi rst-to-market races in the pharmaceutical industry have given rise
to a multiplicity of business models and interfi rm arrangements to choose from or
gravitate between. The industry is evolving fast, mixing-and-matching from a smor-
gasbord of options based on fl uctuating demands and environmental shifts. Large
vertically integrated fi rms coexist and collaborate with organizations with a strictly
narrow focus, alliances and partnerships are frequently formed and dissolved, new
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For example, a fi rm that has serendipitously made a discovery in a non-focal area can partner up
with a company whose research focus matches the discovery in question so that they can jointly
take the new drug to market.
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