Organizing Pharmaceutical Innovation : From Science-Based Knowledge Creators to Drug-Oriented Knowledge Brokers

The pharmaceutical industry is exposed to severe conditions: while a typical R&D process lasts up to 13 years, only one out of 10,000 substances becomes a marketable product. In addition, markets for pharmaceutical products tend to become more fragmented, leading to an increased risk of market failure. At the same time, R&D productivity has been deteriorating for several years. The number of new drug approvals is constantly declining, while R&D expenditures are escalating as a result of high investments in new drug discovery technologies and more complex clinical studies. As a response, pharmaceutical firms have started to focus on balancing the right size and structure of their R&D activities. This leads to several organizational trends: (1) novel management of technologies; (2) R&D internationalization; and (3) open innovation modes