Biotechnology clusters, "Big Pharma" and the knowledge-driven economy

Abstract

The pharmaceutical industry remains powerful due to its firm scale and global reach. However, analysis of the source of biotechnology-derived products in healthcare, valued at $70 billion worldwide by 2000, reveals an almost complete dependence, in three key markets of the USA, UK and Germany, on products developed by entrepreneurial biotechnology firms. These tend to operate in knowledge-driven clusters centred upon universities, research hospitals and research institutes, supported in major ways by public funding. This, and the growing public perception of possible problems with biotechnologies will increasingly bring "big pharma" into uncertain relations with governmental bodies, something that has been pronounced in the UK of late. Whether large pharmaceutical firms will retain their traditional powers of action in relation to governments and markets under these circumstances seems unlikely. However, such is their control over marketing and distribution as well as funding of entrepreneurial firms within or outside biotechnology clusters, that any serious challenge to their hegemony is difficult to envisage at present.