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3 - The evolution of pharmaceutical innovation

Published online by Cambridge University Press:  22 September 2009

By
Paul Nightingale  and
Surya Mahdi
Edited by
Mariana Mazzucato  and
Giovanni Dosi
Paul Nightingale
Affiliation:
Science Policy Research Unit, University of Sussex, Brighton, United Kingdom
Surya Mahdi
Affiliation:
Science Policy Research Unit, University of Sussex, Brighton, United Kingdom
Mariana Mazzucato
Affiliation:
The Open University, Milton Keynes
Giovanni Dosi
Affiliation:
Sant'Anna School of Advanced Studies, Pisa
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Summary

Introduction

The aim of this chapter is to explain and highlight a consistent pattern of changes within pharmaceutical R&D processes that produce “small molecule” therapeutics. In doing so, it aims to provide an alternative to the traditional “biotechnology revolution” conception of these changes, whereby a search regime focused on chemistry and on large, integrated pharmaceutical firms is being displaced by a new search regime focused on molecular biology and networks of smaller, dedicated biotech firms. It instead suggests that the changes are better understood within a Chandlerian framework in terms of an “industrialization of R&D,” whereby firms adapt their technologies and organizational structures to exploit the economies of scale and scope that are made possible by economic interdependencies within knowledge production (see Chandler, 1990; Rothwell, 1992; Houston and Banks, 1997; Nightingale, 1998, 2000). These economically important interdependencies are a consequence of knowledge having value only in context (Nightingale, 2004), and generate scale economies because information that is integrated into a coherent whole can have more economic value than the same information divided into its component parts and distributed between economic agents who fail to realize its full value.

The chapter will suggest that changes within pharmaceutical innovation processes over the last twenty years have been driven largely by a shift from a trial and error approach to drug discovery to one that attempts to use scientific understanding of the biology of disease to find drugs for particular diseases and markets (see Schwartzman, 1976; McKelvey, 1995).

Type
Chapter
Information
Knowledge Accumulation and Industry Evolution
The Case of Pharma-Biotech
 , pp. 73 - 111
Publisher: Cambridge University Press
Print publication year: 2006

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