Advanced Search
MyIDEAS: Login

The Nature and the Extent of the Market for Technology in Biopharmaceuticals

Contents:

Author Info

  • Arora, Ashish
  • Gambardella, Alfonso
  • Pammolli, Fabio
  • Riccaboni, Massimo

Abstract

This paper explored an unusually comprehensive dataset of more than 2,000 drug R&D projects all over the world during the 1990s. This enabled us to characterise several features of the innovation process in pharmaceuticals, particularly the different role and comparative R&D performance of the large established drug companies vis-à-vis smaller high-tech specialist firms - the so-called New Biotechnology Firms (NBFs). Our results can be summarised as follows: a)The NBFs are largely an American phenomenon. More than half of the drug R&D projects originated in the US are by NBFs, while almost 90% of the drug R&D projects originated in Europe are from established pharmaceutical firms; b)Collaborative R&D projects are consistently more likely to occur in the US than in Europe. However, in-house projects are a significant majority of the drug R&D projects that entered the clinical stages. c)The established pharmaceutical companies have comparative advantages with respect to the NBFs in drug development (clinical trials). In drug discovery there is no advantage related to scale. Unlike clinical developments, where the large firms seem to have superior capabilities when compared to the NBFs, in discovery there is no inherent superiority (in terms of ultimate probability of success of the compounds) of either the NBFs or the large firms. d)The NBFs are not specialized in more risky R&D projects. In fact, more risky drug projects (i.e. drugs for which there is no or there are few existing remedies) are more likely to be undertaken by the larger pharmaceutical companies. This suggests that scale, market power, and the ability to moblise large amounts of resources are key factors in enabling the firms to sustain such higher risks. e)Other things being equal, the projects originated by the NBFs are more likely to fail in the earlier clinical stages. This suggests that the NBFs perform a good deal of exploration without incurring the higher costs of failing at later stages.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://mpra.ub.uni-muenchen.de/15977/
File Function: original version
Download Restriction: no

Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 15977.

as in new window
Length:
Date of creation: Dec 2000
Date of revision:
Handle: RePEc:pra:mprapa:15977

Contact details of provider:
Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC

Related research

Keywords: Innovation; Markets for technology; Biopharmaceutical Industry; R&D Collaboration;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Holmstrom, Bengt, 1989. "Agency costs and innovation," Journal of Economic Behavior & Organization, Elsevier, vol. 12(3), pages 305-327, December.
  2. Hagedoorn, John & Schakenraad, Jos, 1994. "The effect of strategic technology alliances on company performance," Open Access publications from Maastricht University urn:nbn:nl:ui:27-4308, Maastricht University.
  3. Gambardella,Alfonso, 1995. "Science and Innovation," Cambridge Books, Cambridge University Press, number 9780521451185.
  4. Joshua S. Gans & David H. Hsu & Scott Stern, 2002. "When Does Start-Up Innovation Spur the Gale of Creative Destruction?," RAND Journal of Economics, The RAND Corporation, vol. 33(4), pages 571-586, Winter.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Jason Owen-Smith & Massimo Riccaboni & Fabio Pammolli & Walter W. Powell, 2002. "A Comparison of U.S. and European University-Industry Relations in the Life Sciences," Management Science, INFORMS, vol. 48(1), pages 24-43, January.
  2. Pammolli, Fabio & Riccaboni, Massimo, 2004. "Market Structure and Drug Innovation," MPRA Paper 16212, University Library of Munich, Germany.
  3. Gambardella, Alfonso & Orsenigo, Luigi & Pammolli, Fabio, 2000. "Global Competitiveness in Pharmaceuticals: A European Perspective," MPRA Paper 15965, University Library of Munich, Germany.
  4. Pammolli, Fabio & Riccaboni, Massimo & Oglialoro, Claudia & Magazzini, Laura & Baio, Gianluca & Salerno, Nicola, 2005. "Medical Devices Competitiveness and Impact on Public Health Expenditure," MPRA Paper 16021, University Library of Munich, Germany.
  5. Michael Rothgang, 2008. "Das Innovationsgeschehen in NRW – Eine Analyse der forschungsaktiven Sektoren," RWI Materialien, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 85, 04.
  6. Patricia M. Danzon & Sean Nicholson & Nuno Sousa Pereira, 2003. "Productivity in Pharmaceutical Biotechnology R&D: The Role of Experience and Alliances," NBER Working Papers 9615, National Bureau of Economic Research, Inc.
  7. Emmanuel Duguet & Stéphanie Monjon, 2004. "Is innovation persistent at the firm Level . An econometric examination comparing the propensity score and regression methods," Cahiers de la Maison des Sciences Economiques v04075, Université Panthéon-Sorbonne (Paris 1).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:15977

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.