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

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

Abstract

The biopharmaceutical industry is a typical example of the development of technological collaborations, as well as of technological competition, between larger established firms and smaller high-tech specialist firms (the so-called New Biotechnology Firms — NBFs). These two types of firms perform innovative activities at different stages, with different degree of risk, and with different probability of failure. By using a comprehensive database of 2078 drug R&D projects promoted all over the world during the 1990s, this study assesses the different performance of R&D processes conducted under different governance structures, most notably projects that are fully internalised by the companies vis-àvis projects developed in collaboration with other firms. Moreover, this study compares the different specialisation and performance of large drug companies with respect to the NBFs. Results show that the established pharmaceutical companies have comparative advantages with respect to NBFs in drug development, while there is no advantage related to scale in drug discovery. Furthermore, NBFs undertake less risky project, which are more likely to fail at earlier clinical stages.

Keywords

Research collaborations R&D Management Pharmaceutical Industry Biotechnology 

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Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  • Ashish Arora
    • 1
    • 2
    • 3
    • 4
  • Alfonso Gambardella
    • 1
    • 2
    • 3
    • 4
  • Fabio Pammolli
    • 1
    • 2
    • 3
    • 4
  • Massimo Riccaboni
    • 1
    • 2
    • 3
    • 4
  1. 1.Carnegie Mellon UniversityUSA
  2. 2.St. Anna School of Advanced StudiesItaly
  3. 3.University of Florence - CERMItaly
  4. 4.University of FlorenceItaly

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