Pharmaceutical Firms Research Articles

The role of patent expiration in acquisition decision and target selection in the pharmaceutical industry

This paper addresses the calls for greater research on the antecedents of technological acquisitions by exploring a mechanism that drives both acquisition decision and target selection. Drawing from the RBV, this paper presents patent expiration as a driver behind pharmaceutical firms’ acquisition decisions and target selection. This paper argues that patent expiration constitutes a disruption to pharmaceutical firms’ pipelines and a threat to revenue and profit streams and that acquisitions represent a possible short‐term solution for firms to replenish their patent portfolios and to ensure a continuous flow of revenues. Using a sample of US pharmaceutical firms, this paper shows that pharmaceutical firms engage in acquisitions when they face large amounts of patent expiration and when they are unable to internally replenish their patent portfolios. The results also show that acquiring firms have a preference for targets with resources similar to their existing portfolio of patents, which is explained by firms’ desire to minimize post‐integration problems and possible disruptions derived from the difficulties in assimilation and commercial exploitation of distant knowledge. This is in contrast with previous studies indicating that acquiring firms benefit from knowledge bases that are more distant.

Could Contracts between Pharmaceutical Firms and French Veterinarians Bias Prescription Behaviour: A Principal-Agency Theory Approach in the Context of Oligopolies

In France, veterinarians can both prescribe and deliver veterinary medicines, which is a questionable situation from the perspective of antimicrobial use (AMU) reduction to avoid antimicrobial resistance (AMR). This situation places veterinarians in direct commercial relationships with the pharmaceutical industry as purchase contracts are signed between veterinarians and pharmaceutical companies. The aim of the present work is to analyse the relationships between veterinarians and pharmaceutical firms in the oligopoly market context of French veterinary medicine to determine whether the prescription behaviour of practitioners can be biased by joint prescription and delivery. Therefore, we develop an analysis based on principal-agent theory. Contracts between pharmaceutical companies and veterinarians during the 2008–2014 period were analysed based on 382 contracts related to 47 drugs belonging to eight main pharmaceutical firms (2320 observations). The price per unit after rebate of each drug and contract was calculated. The descriptive analysis demonstrated high disparity among the contracts across pharmaceutical firms with regard to the provisions of the contracts and how they are presented. Then, linear regression was used to explain the price per unit after rebate based on the explanatory variables, which included the yearly purchase objective, year, type of drug and type of rebate. The decrease in price per unit after rebate for each extra €1000 purchase objective per drug category was established to be €0.061 per 100 kg body weight for anticoccidiosis treatments, €0.029 per 100 kg body weight for anti-inflammatories, €0.0125 per 100 kg body weight and €0.0845 per animal for antiparasitics, and €0.031 per animal for intramammary antimicrobials. Applying agency theory reveals that veterinarians can be considered agents in the case of monopolistic situations involving pharmaceutical firms; otherwise, veterinarians are considered principals (oligopolistic situations in which at least several medicines have similar indications). The present study does not provide evidence suggesting that joint prescription and delivery may introduce any potential prescription bias linked to conflicts of interest under the market conditions during the 2008–2014 period.

Does Employee Care Trigger Innovation Under a Healthy and Safe Working Environment? Evidence from the Pharmaceutical Industry in China.

Sustainability of the workforce becomes a crucial issue, of which responsible care for employees can increase job satisfaction and human capital that impact corporate ability to absorb and generate new knowledge. Firms are obligated to provide a healthy and safe working environment for their employees, but it may in turn hinder innovation due to rigid and structured institutional regulations. Drawing on data of 308 China’s pharmaceutical firms from 2010 to 2017, we investigated whether employee care can trigger innovation under corporate adoption of the occupational health and safety management system (OHSMS). Our results suggest that both employee care and OHSMS adoption have a positive impact on innovation. Moreover, the positive relationship between employee care and innovation was more pronounced in firms that had adopted the OHSMS certification. These findings are valuable to policymakers and corporate managers in emerging economies through corroborating the important role of workforce sustainability in facilitating firm innovation.

How Does Regulation Impact Strategic Repositioning by Firms Across Submarkets? Evidence from the Indian Pharmaceutical Industry

We study coercive institutional pressures as an impetus for firms to reposition across intraindustry boundaries. Integrating the literatures on strategic repositioning and submarkets, we predict that firms respond to regulations limiting the profitability of a submarket by repositioning and shifting demand to proximate, unregulated submarkets within the industry. We expect repositioning to be more pronounced for firms with greater ability to shift demand across submarkets. Evidence from pharmaceutical firms’ responses to partial price regulation in India supports our hypotheses. Repositioning firms increase prices and sales in the unregulated submarket, consistent with a Dorfman–Steiner-type model of endogenous and costly demand shifting toward the unregulated submarket. We contribute to the literature on strategic repositioning and highlight challenges of regulating industries with internal boundaries and insulated niches.

How blockchain will transform the healthcare ecosystem

Blockchain has the potential to fundamentally transform the healthcare ecosystem, impacting all healthcare participants. In this article, we study the potential impact of blockchains on patient-centered care delivery by looking at the ecosystem of blockchain-based solutions being developed for key stakeholders: patients, pharmaceutical firms, hospital systems, and insurance providers. Building from our interviews with senior managers, our actual experience in the healthcare industry, and our academic research, we outline how blockchain will transform healthcare, and we provide guidance as to how those in healthcare need to start thinking about engaging with blockchain technology.

Intellectual capital stocks and flows: examining the mediating roles of social capital and knowledge transfer

PurposeThis study aims to develop and empirically test a “stocks and flows”-based model of intellectual capital (IC) that examines how human-embodied knowledge (i.e., human capital) can be transformed into organisational non-embodied knowledge (i.e., organisational capital) through the mediating roles of social capital and the knowledge management (KM) process of knowledge transfer.Design/methodology/approachA structural model was developed and empirically tested using a survey data set of 295 questionnaires collected from the “knowledge-intensive” pharmaceutical manufacturing industry in Jordan.FindingsEmpirical results revealed that each of human capital, social capital and knowledge transfer has a positive and significant effect on organizational capital. In particular, knowledge transfer emerged as having the strongest effect. Social capital, on the other hand, emerged as having a positive and significant effect on knowledge transfer. Mediation analysis revealed that while human capital significantly affects organizational capital, such an effect is partially and significantly mediated by each of social capital as well as knowledge transfer.Practical implicationsThis study provides senior managers in pharmaceutical manufacturing firms with valuable insights pertaining to the development of their IC, in terms of how to exploit their knowledge stocks (i.e. human-embodied knowledge and organizational non-embodied knowledge) through managing knowledge flows between them. This was shown to be significantly leveraged by the mediating roles of social capital as well as knowledge transfer.Originality/valueThis study provides important theoretical and empirical contributions to the extant literature in a number of ways. It provides better understanding of the intricate linkages among IC dimensions, and how these play complementary roles in organizational capital development. It has also provided important empirical evidence highlighting the vital mediating roles of social capital and knowledge transfer in facilitating knowledge flows, which aid in transforming human-embodied knowledge stocks into organizational-embodied ones.

Analyzing the Determinants of Employee Retention: A Case of Pharmaceutical Companies in Pakistan

Employee retention could be a crucial issue within the pharmaceutical industry of Pakistan. As of now workplace and workers both are influenced at the same time with this genuine issue. Therefore there is a need of research to retain the assets of the company. The main cause of the following research is to demonstrate the factors which influence the employee retention. The variables we are using are job satisfaction, salary & rewards, career development & superior support. Sample size of the study was 250 out of 250 questionnaires was filled by 214 employees in which 89.0% were male and 11.0% were females of different pharmaceutical firms of Pakistan. In this we use quantitative research the study is based on mono method research. The collected primary data has been analysed through SPSS & Smart PLS and correlational analysis. If the result of the study is been concluded so it has been shown that all the variables have significant relationship and alternative hypothesis are accepted. 
 As a result the uniqueness of the research study is also significant which shows that working on their talented people (employees) and to keep them satisfying is important for the productivity of organization. The study has different indication as it has given new ways to the pharmaceutical sector to retain their employees and reduce the cost of hiring by retention.

The Pharmaceutical Firms of Pakistan: An Overview of Multidimensional Performance

The pharmaceutical industry of Pakistan is now meeting around 80% of total domestic demand with an annual11% growth rate. But the question arises as to whether the firms produce efficiently? The paper measures cost efficiency of the pharmaceutical industry of Punjab using Data Envelopment Analysis (DEA) for the period of 2014-15. The factors affecting the cost efficiency is also determined by using Tobit method. In first stage, value added is used as single output and number of employs, raw material, and cost of salary are as inputs. The result suggested that the cost efficiency of the pharmaceutical firms is 27.7% which is determined by 46% technical efficiency (TE) and 60.8% allocative efficiency (AE). It means wastage of resources is cost increasing factors in these firms. In the second stage, among the variables i.e. firm’s market share, firm’s Herfindahl-Hirschman Index (HHI) of market concentration, values of assets, energy, Herfindahl-Hirschman Index has strong positive effect on cost efficiency.

Inventory conversion period and profitability relationship of the listed pharmaceutical firms of Jordan

The study objects for determining whether or not a relationship exists between inventory management of the listed pharmaceutical firms at Amman Stock Exchange, and the profitability of these firms, and whether or not inventory management affects firm profitability. Only three pharmaceutical firms were found listed at Amman Stock Exchange by the end of 2020, and therefore, the annual data of the three firms along the period 2009-2019 were collected and used in the analysis and hypothesis testing. Inventory turnover and average inventory holding period were used as indicators for inventory management at a reciprocal form, whereas, return on assets was used as a measure of firm profitability. Using the Pearson correlation method, the analysis and hypothesis testing demonstrated that a significant positive relationship exists between inventory turnover and return on assets, and a negative significant relationship exists between average inventory holding period and return on assets. Moreover, using the ordinary least square method, the study shows that inventory management has a positive significant effect on firm profitability. More studies regarding inventory management and firm profitability relationships, are recommended to be performed on other manufacturing industries than pharmaceutical firms.

Global access to medicines: An uphill struggle

Background: The study originated from the authors’ coursework in health technology assessment and rational pharmaceutical policy. Purpose: To respond to the question of whether there is a global problem of access to medications by providing differentiated backgrounds and possible solutions or mitigation strategies for boosting the population’s access to medications. Method: Thematic content analysis (TCA) was performed on paper-based data. Findings: 39 documents were included, including 22 articles, eleven technical reports, two books, one book chapter, and three websites. Drug accessibility issues affect four major categories – essential, innovative, orphan, and highly-priced medicines. Access to these medications is nevertheless hampered for several reasons, including patents; prohibitive costs; fluctuating production; market unprofitability for rare diseases; and delays in innovative treatments, even in developed countries. Conclusion: Efforts to boost drug access should target all sectors – public, private, and non-governmental – and should forge ties with pharmaceutical firms and key health care institutions. * This study arose from the authors’ coursework “Health Technology Assessment and Rational Pharmaceutical Policy” for the European Public Health Master: Europubhealth+ Studies, which was funded by the European Union’s Erasmus+ Program.

University-Industry Interaction in Tunisia: Exploring Benefits for the University from a Firm Level of Analysis

During the last three decades, university–industry interaction (U–I) has appeared as a specific field of study. In this context, research which study benefits that these relationships can bring to university remain insufficiently explored. Specifically, studies on developing countries remain fewer. The aim of this paper is to examine the extent of interactions by exploring benefits that firms can bring to university from a firm level of analysis. The importance of such relations has been discussed in many studies but studying benefits from a firm level are still poor, especially in African context. The methodology includes a qualitative research based on the use of content analysis. Data was collected from semi-structured interviews conducted within four Tunisian pharmaceutical firms. The results show similarities between the firms. Benefits include practical knowledge transfer, learning, joint research, accessing laboratory equipment and infrastructure, training opportunities, hiring graduates or postgraduates. But benefits don’t include securing funds because of the limited pharmaceutical firms’ resources. Moreover, interaction is concentrated in the short term and in the trainee and researchers’ level. This study also indicates that, like other African countries, U-I relations should be supported by political policy. Such policies contribute to involve legislation revision, implementing support mechanisms that enhance U–I interaction and stimulate connections between universities and firms.

Brexit Calling! Aftermath in the Pharmaceutical Industry

This paper aims to examine the impact of the Brexit referendum on the financial performance of the pharmaceutical industry in the United Kingdom. We analyze daily data for the period 1/2000-10/2019, for the two largest British pharmaceutical firms, GlaxoSmithKline and AstraZeneca, as well as two European competitors, the Swiss Novartis and the German Bayer. We perform returns and volatility analysis, financial ratio analysis and regression analysis. Our empirical results are heterogeneous among firms, pinpointing strengths and weaknesses of the pharmaceutical firms. The Brexit decision has had a significant, positive effect on the stock returns of the two British firms, a negative effect for Bayer and no effect for Novartis, while lagged returns are significant only for the European firms. At least in the short-run, both British firms have gained considerably from the depreciation of the sterling and should aim to expand their overseas network and avoid prospective trade barriers and regulatory issus

Peeling Back the Association between Salesperson Political Skill and Salesperson Performance: Evidence from the Pharmaceutical Sector

Existing literature on the association between salesperson personality and salesperson performance is, at best, unequivocal. This research introduces a relatively less explored personality trait (i.e., political skill) to explore additional variance in sales performance and settle inconsistencies in existing findings. Building on the conversation of the resource theory, this research proposes that frontline sales employees’ political skill influences employees’ sales performance, ultimately contributing to the firm’s performance. The hypotheses nexuses are tested using data of 253 frontline sales employees working with national and multinational pharmaceutical firms. A paper and pencil method were used to collect data, in a two-month time interval, from the frontline sales employees. The result indicates that political skill influence frontline employees’ sales performance, such that the sales employees with high political skill can not only understand the tacit needs of customers but such salespeople also effectively communicate and coordinate with internal customers, which complements salesperson while approaching their current and potential customers. These findings confirm the existing literature on political skill and also extend the concept in sales and sales management literature. Besides theoretical contributions, our study also offers insights for effective managerial interventions, particularly for employees and managers working in pharmaceutical firms. Caveats, along with future directions, are also outlined.

Opportunities for Patents in Pharmaceutical Industry: An empirical study Drug Developers Opinion

Industries devote huge sums of money and resources in research and development to bring new medications to market in the fiercely competitive pharmaceutical sector. The price of creating new pharmaceuticals is significant, and it can take a while for them to reach the market. Patents give pharmaceutical companies a temporary legal monopoly on their product, which encourages innovation by enabling them to recoup their costs and turn a profit. In the pharmaceutical sector, there is a huge potential for patents, and businesses are constantly looking for innovative strategies to safeguard their inventions. Patents give drug developers an advantage over rivals in the market in addition to safeguarding their intellectual property. A business that has a substantial patent portfolio can stop rivals from entering the market and stealing market share. A strong patent portfolio can also draw investors and business partners because it shows a company's dedication to innovation and capability to safeguard its intellectual property. People from Pharmaceutical industry are considered in this research work, and it is found that Patents give pharmaceutical firm a legal monopoly on temporary basis on their product, Patents give medicine developers a competitive edge in the market, Patents has given Indian pharmaceutical firms the chance to be more creative and develop novel medications.

Efficiency in the CRO industry, 2010-2019

Outsourcing to Contract Research Organizations (CROs) has become a widespread practice by pharmaceutical and biotechnological firms seeking to reduce risks and costs associated to the development of new products. This paper analyzes empirically the efficiency of the CROs industry by looking at a sample of firms operating in Europe over the years 2010-2019. We compute efficiency scores of the firms in the sample by means of DEA non- parametric techniques. Basic results suggest that the sector achieves large levels of average efficiency, amounting to 0.716. Average efficiency increases over time in the time horizon considered. A second stage Tobit estimation implies that big firms exhibit higher levels of efficiency than medium size and small firms because large sizes facilitate the use of state-of-the-art technology for data collection and analysis and the accession to stable commercial alliances. Efficiency is also positively correlated with sound human resource and financial managements, and with a moderate size of the fixed assets held by the firm. These results suggest that more merges and acquisitions are expected in this sector in the near future.

The impact of risk preference of top management team on re-innovation behavior after innovation failure

This paper takes the listed pharmaceutical manufacturing firms in China’s A-share market from 2011 to 2017 as the research sample, from the perspective of top managers’ pay gap, employs principal component analysis and general least square method to empirically investigate the effect of risk preference of top management team(TMT) on the re-innovation behavior after the failure of innovation. The study found that the risk preference of TMT is positively correlated with the re-innovation input and brand-new innovation after the failure of innovation, but not with the supplementary innovation. Besides, the pay gap not only has a positive moderating effect on the positive correlation between the risk preference of TMT and the re-innovation input, but also on the positive correlation between the risk preference of TMT and the brand-new innovation after the failure of innovation. The findings of this study contribute to: (1) through empirical research on the impact of TMT risk preference on re-innovation behavior after innovation failure, expand the relevant research content and research methods of TMT and innovation failure to make the research results more convincing; (2) by setting a reasonable executive compensation gap, TMT can avoid blindly choosing brand-new innovation behavior after innovation failure with the increase of risk preference innovation, ignoring the potential value of innovation failure projects without supplementary innovation, improving the re-innovation behavior of TMT after innovation failure and improving the re innovation success rate after innovation failure.

The Effect of Organizational Resilience and Strategic Foresight on Firm Performance: Competitive Advantage as Mediating Variable.

The pharmaceutical industry’s performance in the global economy has been affected by the growing competition associated with globalization, economic liberalization, and the trade-related aspect of the intellectual property rights (TRIPS) agreement. To maintain performance, organizations need to consider strategic foresight (SF) and organizational resilience (OR) to anticipate future trends and survive crises. By proposing a conceptual framework, this study examines the relationship between organizational resilience, strategic foresight, competitive advantage (CA), and firm performance (FP). A conceptual framework was developed to assess the hypotheses in the pharmaceutical industry. Then, partial least squares structural equation modeling (PLS-SEM) was applied to investigate the relationships quantitatively. The results of structural equation modeling (SEM) based on the data generated from 202 completed questionnaires by the pharmaceutical companies in Iran demonstrate that OR, SF, and CA have significant positive impacts on FP. Moreover, CA partially mediates the relationship between OR and FP and also between SF and FP. The findings of this study enrich the existing literature by demonstrating that early detection of environmental change and resilient manner assist Iranian pharmaceutical firms to survive if joining the WTO. This is the first study that examines the direct and indirect effect of OR and SF on the FP, considering the mediating impact of CA. This investigation attempts to address the mechanisms through which OR and SF affect organizational performance, especially in the pharmaceutical industry.

Sharpen Your Sword: The Reaction of Branded Pharmaceutical Firms to the Threat of Generic Entry

Sharpen Your Sword: The Reaction of Branded Pharmaceutical Firms to the Threat of Generic Entry

Patenting motives of pharmaceutical firms: a perspective on changing role of patents and firms' strategy in business

Patenting motives of pharmaceutical firms: a perspective on changing role of patents and firms' strategy in business

Negative Effects of Intellectual Property Protection on Trade: The Unusual Suspects

Previous literature has noted the negative effects of intellectual property protection (IPP) on trade volume when the market power effect dominates market expansion effect. Since both the effects increase profits, IPP often induces entry without ambiguity. However, this study, using product-level entry data, found that IPP has an adverse impact on market entry of large pharmaceutical firms. Direct supply entry mode was found to be negatively related to IPP, while IPP positively affects licensing. This implies that firms facing infringement risk or those who develop a technology market in stringent IPP countries often rely on licensing.