INNOVATION MODELS IN THE BIOPHARMACEUTICAL SECTOR - Innovation in the Biopharmaceutical Industry - page 23

increased. It appears likely to further reduce returns from numerous countries,
especially new member states.
6. Greater efforts have been made to access a wider range of developed and middle-
income countries (most notably, China and India) with R&D investment offered
as a quid pro quo.
The final phase of the innovation process is achieving timely market diffusion of
innovations to benefit both patients and the innovator. Expenditure on marketing by
pharma companies has been commented on by critics who base their arguments upon
a partial model of the innovation process which equates it to invention and R&D.
This partial model fails to recognise that innovation is a cyclical, business driven
process in which there will only be “repeat” innovation in the future if today's
innovations complete the cycle through the market diffusion phase and generate
revenues, which in part can be re-invested.
Conclusions
This review analyses the many models used for the bio-pharmaceutical sector in the
wider context of general theories and models of innovation. It illustrates the com-
plexities of a sector undergoing dramatic change both in its science and technology
base and in the global markets for its products.
This study also addresses the underlying challenges in assessing the value of
innovative products and the use of appropriate terminologies used for classifications.
It raises serious doubts about how meaningful it is to make simple distinctions
between “breakthrough” and “non-breakthrough” products, or even at the product
level, the distinction between radical and incremental innovations. Research on
the evolution of product classes over long time periods indicates that competitive
development races and incremental differences seem to be the dominant paradigm.
Changes in the factors determining industry appropriation of value suggest that
returns are diminishing on R&D outside of the US, which is likely to both constrain
and narrow the scope of future investment. The short-term pressures that delay
access to national markets and diffusion within markets at the beginning of the
market life cycle, in conjunction with worldwide generic competition at the end,
indicate that fewer new products will break even on development costs.
In the wider context of the bioscience wave, although there is a strong pattern of
scientific advances and patentable inventions, it still remains in doubt whether clo-
sure can be brought to the innovative process through successful commercialisation.
There is a risk in Europe that the widespread social and economic benefits
that have long been predicted from the biotechnology revolution could be either
greatly diminished or substantially lost in the backwash of short-term healthcare