Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- Acknowledgments
- 1 Introduction
- Part I Innovation and industry evolution
- 2 Pharmaceutical innovation as a process of creative destruction
- 3 The evolution of pharmaceutical innovation
- 4 Firm and regional determinants in innovation models: evidence from biotechnology and traditional chemicals
- 5 Innovation and industry evolution: a comment
- Part II Firm growth and market structure
- Part III Policy implications
- Index
- References
3 - The evolution of pharmaceutical innovation
Published online by Cambridge University Press: 22 September 2009
Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- Acknowledgments
- 1 Introduction
- Part I Innovation and industry evolution
- 2 Pharmaceutical innovation as a process of creative destruction
- 3 The evolution of pharmaceutical innovation
- 4 Firm and regional determinants in innovation models: evidence from biotechnology and traditional chemicals
- 5 Innovation and industry evolution: a comment
- Part II Firm growth and market structure
- Part III Policy implications
- Index
- References
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 EvolutionThe Case of Pharma-Biotech, pp. 73 - 111Publisher: Cambridge University PressPrint publication year: 2006
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