Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- Acknowledgments
- 1 Introduction
- Part I Innovation and industry evolution
- Part II Firm growth and market structure
- 6 Heterogeneity and firm growth in the pharmaceutical industry
- 7 Growth and diversification patterns of the worldwide pharmaceutical industry
- 8 Entry, market structure, and innovation in a “history-friendly” model of the evolution of the pharmaceutical industry
- 9 The growth of pharmaceutical firms: a comment
- Part III Policy implications
- Index
- References
6 - Heterogeneity and firm growth in the pharmaceutical industry
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
- Part II Firm growth and market structure
- 6 Heterogeneity and firm growth in the pharmaceutical industry
- 7 Growth and diversification patterns of the worldwide pharmaceutical industry
- 8 Entry, market structure, and innovation in a “history-friendly” model of the evolution of the pharmaceutical industry
- 9 The growth of pharmaceutical firms: a comment
- Part III Policy implications
- Index
- References
Summary
Introduction
In this chapter we investigate some properties of the patterns of firm growth in the pharmaceutical industry. The issue of firm growth is interesting as such, but there are two particular (related) reasons why we believe it to be particularly intriguing in the case of pharmaceuticals.
First, surprisingly, very little detailed statistical evidence on the subject is actually available. Second, it is worth exploring how the peculiar underlying patterns of innovation and competition that characterize pharmaceuticals translate into firms' growth.
The main features of the structure of the pharmaceutical industry can be summarized as follows. It is a highly innovative, science-based, R&D- and marketing-intensive industry. However, the industry is characterized by quite low levels of concentration, both at the aggregate level and in the individual sub-markets, such as, for example, cardiovascular, diuretics, and tranquilizers. Similarly, the international pharmaceutical industry is characterized by a significant heterogeneity in terms of firm size, strategic orientations, and innovative capabilities. The “innovative core” of the industry has traditionally been composed of a relatively small group of large corporations (“big pharma”), which includes many of the early entrants from the turn of the twentieth century. These firms are located in the countries that have dominated the industry ever since its inception, namely Germany, Switzerland, the United Kingdom, and the United States. These firms maintained an innovation-oriented strategy over time, with both radical product innovations and incremental product and process innovations.
- Type
- Chapter
- Information
- Knowledge Accumulation and Industry EvolutionThe Case of Pharma-Biotech, pp. 163 - 207Publisher: Cambridge University PressPrint publication year: 2006
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