Pharmaceutical Firms Research Articles

The TRIPS Agreement and the Pharmaceutical Industry in India

The World Trade Organization’s (WTO’s) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) calls for the harmonization of intellectual property rights (IPRs) regulations across all WTO member countries. The TRIPS Agreement requires all WTO member countries to adopt and enforce minimum standards of intellectual property. It was assumed that the introduction of pharmaceutical product patents would hamper the Indian pharmaceutical industry’s growth. Contrary to expectations, however, the Indian pharmaceutical industry has been growing in the post-TRIPS period. The TRIPS Agreement changed the research and development (R&D) orientation of Indian pharmaceutical companies, which have increased their R&D investments. Since the TRIPS Agreement was signed, the pharmaceutical global value chain (GVC) has been re-structured and has now expanded to emerging countries like India. Indian pharmaceutical firms have thus been participating in the pharmaceutical GVC in the post-TRIPS period. This participation is conducive to technological upgrading and technology transfers. While operating in the GVC, Indian pharmaceutical firms are upgrading by adopting state-of-the-art technologies. This study explores how the TRIPS Agreement is influencing the Indian pharmaceutical industry and discusses the industry’s growth factors in the post-TRIPS period within the GVC framework. JEL: L21, L24, L26, L65

From Maverick to Mole: John C. Burnham, Tobacco Consultant

From Maverick to Mole: John C. Burnham, Tobacco Consultant

PLS Modelling of Factors Aff ecting the Cooperation Between Sales and Marketing in Pharmaceutical and Non-Pharmaceutical Manufacturing Firms

Purpose – This paper aims to explore the manner in which cooperation between sales and marketing in pharmaceutical manufacturing companies (PMC) (n=16) and non-pharmaceutical manufacturing companies (NPMC) (n=31) is aff ected by selected indicators. It also attempts to demonstrate how the Partial Least Square (PLS) path modelling technique can reveal latent mechanisms in the interplay of the examined factors aff ecting SM cooperation. Design/methodology/approach – Data collection was carried out in the form of an online questionnaire. The rating scale data gathered was analyzed using PLS path modelling. Findings – Management culture (information exchange, coordination, vision, and communication) as the superblock of the model accounts for a high variance in SM cooperation in both PMCs (R 2=0.619) and NPMCs (R2=0.741). Out of the three variables determining management culture, in PMCs it is coordination (R2%=44), while in NPMCs it is information exchange (R2%=57) that accounts for most of the variance. The results clearly demonstrate that there are factors aff ecting SM cooperation that work diff erently in PMCs and NPMCs. Limitations – As the analysis in this research study was based on a convenience sample, its result should be interpreted with caution and cannot be generalized. Originality/value – This is the fi rst time that the SM interface mechanisms were compared in PMCs and NPMCs using PLS path modelling. PLS revealed latent relationships and mechanisms that play an important role in optimising SM cooperation.

Trade-Off Between Liquidity and Profitability: An Empirical Study of Pharmaceutical Sector in the Republic of North Macedonia

Abstract The relationship between liquidity and profitability is one of the most interesting topics in the corporate finance research. Having in mind that the pharmaceutical industry is one of the most competitive sectors globally and that its substantial investments in research and development make this industry a key asset for a country’s economic well-being, this paper examines the liquidity-profitability trade off in pharmaceutical sector of RNM. The empirical research engages the secondary annual financial report data of the two pharmaceutical companies listed on Macedonian Stock Exchange (MSE) over the period from 2006-2016. Current ratio (CR), quick ratio (QR) and cash ratio (CAR) were used as measures of liquidity while return on assets (ROA) and return on equity (ROE) were used to measure profitability as a dependent variable. The statistical tests used to evaluate the effects of liquidity on profitability involved descriptive statistics, correlation and regression analysis. The findings suggest that there is no significant relationship between profitability and liquidity determinants of the listed North Macedonian pharmaceutical firms. Regarding practical implications, these findings can help managers overcome dilemmas with respect to the liquidity and profitability tradeoff. Furthermore, this study contributes to the existing research base in this field and represents one of the pioneer attempts in the case of RNM. The results gained from the research are very important for companies themselves, but they can also serve as a starting point for future research to eliminate financial and other corporate issues related to the relationship between profitability and liquidity determinants.

Customer Suppliers Relations, Customer Knowledge, Strategic Alliance Licensing Agreement, customer knowledge and Business Performance of Pharmaceutical Firms in Nairobi County

Customer supplier relations, customer knowledge and strategic licensing agreements re sub variables of Relational capital that helps the organization to interact positively with business community members to motivate the potential for wealth creation by enhancing human and structural capital.  Relational capital comprises the knowledge embedded in all the relationships an organization develops whether it is with customers, competitors, suppliers, trade associations or government bodies. The purpose of the study was to test the relationship between, Strategic Alliances, Licensing and Agreements, Customer and Supplier Relations and influence performance of pharmaceutical firms in Nairobi County. The study was carried out in Nairobi since most of the pharmaceutical firms were located here apart from a few, which were based outside Nairobi. The research study adapted three research designs namely: Quantitative, explanatory and descriptive research design. The target population constituted 89 pharmaceutical firms and the sample frame was comprised of 31 local pharmaceutical firms. Thus represented 35% of the total population. Purposive sampling procedure was used to arrive at 31 pharmaceutical firms while judgmental sampling was used to target the human resource managers. Out of the 31 pharmaceutical firms the response rate was 18 companies. The instrument of data collection was a structured questionnaire with questions anchored on a five (5) point Likert type ranking scale which was administered to the respondents. The data processing and analysis was done mainly by the use of logarithmic multiple linear regression analysis. The results and findings of the study indicated that the sub variables of relational capital (customer supplier’s relations, customer knowledge, strategic alliance licensing agreement) influenced business performance of pharmaceutical firms in Nairobi County. The overall model indicated that Customer Suppliers Relations with a P-Value of 0.031and Customer Knowledge with a P-value of 0.070 had positive and significant influence to business performance of pharmaceutical firms in Kenya, while Strategic Alliance Licensing Agreement 0.160 had a positive but insignificant influence on business performance.

How could firms benefit more from absorptive capacity under technological turbulence? The contingent effect of managerial mechanisms

ABSTRACTBased on the knowledge-based view, this paper examines how firms can achieve an enhanced new product performance from the absorptive capacity under technological turbulence. By examining 165 Chinese pharmaceutical firms' data, this paper found that under technological turbulence, the benefits of absorptive capacity on new product performance will decrease; however, if firms maintain complementary managerial mechanisms (technological environmental scanning mechanism and coordination mechanism in this paper), the decrease effect of technological turbulence could be mitigated. Theoretically, the negative moderating effect of technological turbulence extends the investigation of the under assumptions of absorptive capacity and enriches the research on the contingency context of ACAP. Moreover, the examination of the alleviation effect regarding the managerial mechanisms responds to the scholar's appeals for more research focusing on management factors in absorptive capacity and product development research. The results also highlight the managerial-environment fit in the new product development area. Practically, this paper offers managerial implications for managers: they should focus more attention on technological breakthroughs so as to prepare early for any potential uncertainties and opportunities; moreover, managers could cultivate the managerial mechanisms to enhance knowledge monitoring and sharing activities, which could be utilised to buffer the uncertainty and update the firm's ACAP.

Scope of Improvement in the Functioning of National Regulatory Authority-A Step Toward International Accreditation: A Qualitative Study From Pakistan.

International accreditations of drug regulatory authorities not only lead to improvement in their functioning but pharmaceutical firms are also benefited. The aim of this study is to identify aspects that should be improved for the purpose of international accreditation and recognition of Drug Regulatory Authority of Pakistan (DRAP). A qualitative study was conducted from May 1, 2017, to July 31, 2017. The data were collected from officials working in DRAP through in-depth semistructured interviews. The respondents were recruited through a convenience sampling strategy. The sample size was determined by using the saturation point criterion. Data were analyzed to draw conclusions using inductive thematic analysis. A total of 12 officials working in DRAP were interviewed. Analysis of the data yielded 25 categories, 10 subthemes, and 3 themes. The themes were administrative barriers, operational barriers, and future aspects of international accreditation. The subthemes related to administrative barriers included human resource, lack of harmonization and coordination, transparency and accountability, and improper resource allocation. The subthemes related to operational barriers included procedures and policies, deficit of testing laboratories and equipment, reporting system for adverse drug reactions, and external factors influencing the functioning of DRAP. The subthemes related to future aspects of international accreditation included advantages associated with international accreditation and time required to achieve this goal. There is a huge scope of improvement in the functioning of DRAP and the identified barriers must be dealt with timely to make it happen.

Do publication activities of academic institutions benefit from formal collaborations with firms?

ABSTRACT While the existing literature has focused predominantly on how firms can benefit from collaborations with academic institutions such as universities and research institutions, this study explores whether the proportion of (formal) collaborations with different types of firm partners in strategic R&D alliances is associated with publications originating in academic institutions. The empirical analysis is based on a unique dataset of publications in pharmaceutical cancer research. The results suggest that the share of collaborations with industry partners has an inverted u-shaped relationship with the reputation of the journal in which an article originating in an academic institution is published. The share of alliances with pharmaceutical firms shows a similar inverted u-shaped pattern, suggesting that research originating in academic institutions can only benefit from alliances with pharmaceutical firms through resource inflows up to a threshold.

Pharmaceutical supply chain risk management: Case of Moroccan pharmaceutical firms

Resume : En raison des changements de l’environnement, la chaine logistique pharmaceutique fait face a des risques internes et externes qui affectent sa performance. Les entreprises luttent contre ces risques a travers les strategies de flexibilite pour s’adapter a ces changements et rester competitifs. Les travaux empiriques sur le domaine de la gestion des risques pharmaceutique sont rares. Donc, l’objectif de ce papier est d’expliquer quelques strategies essentielles de gestion des risques adoptees dans les laboratoires pharmaceutiques et dont ils investissent plus de ressources. Ces strategies sont liees a l’approvisionnement et la demande qui sont la majorite des strategies proactives.

Rushed Innovation: Reactive Licensing in the Pharmaceutical Industry

We study the drug licensing behavior (acquisition of rights for developing drugs) of large pharmaceutical firms in the aftermath of large negative shocks to their pipelines, Phase 3 failures (P3Fs). We find that P3Fs lead to increased licensing within a year of the event. This result is significant because one year is a short window given the usual timelines---licensing is a lengthy process that requires extensive planning and careful execution. Supported by a series of additional results, we interpret this finding as a reflection of rushed firm behavior. Correspondingly, our main finding is that drugs licensed in these circumstances (within a year of a P3F event) underperform in subsequent development: they are significantly less likely to reach the market compared to others licensed in normal conditions. Further analysis suggests that this underperformance may stem from the influence of rush on activities taking place in the last mile of the licensing process, and could hinge on the quality of the agreements that firms converge on during negotiation.

CEO research orientation, organizational context, and innovation in the pharmaceutical industry

AbstractThis study develops and tests a comprehensive framework that explains what, when, and how CEO characteristics influence firms’ innovation outcomes in R&D‐intensive industries. Empirical evidence from 109 CEOs from 87 U.S.‐based pharmaceutical firms over the period 2001–2013 reveals that research‐oriented CEOs – those with ability and motivation for science and technology – increase their firms’ innovation outcomes. The results indicate that the CEO–innovation relationship strongly depends on the extent of CEOs’ managerial discretion, which is shaped by the organizational context. We contribute to a more comprehensive understanding of the role of CEOs in firms´ innovation performance differentials.

Nobel Medicine research fuels drug efforts

The Nobel Prize in Physiology or Medicine often goes to those whose research has inspired or is on the cusp of spawning therapeutics, and the 2019 prize is no exception. Gregg L. Semenza, one of the three 2019 Nobel laureates, tells C&EN that pharmaceutical and biotech firms are eagerly developing medicines that target different parts of this oxygen-sensing mechanism for diseases like cancer and anemia. In 1991, Semenza, a scientist at Johns Hopkins University, discovered that a transcription factor called HIF-1α could bind DNA and boost the production of blood. Colleagues and colaureates Sir Peter J. Ratcliffe and William G. Kaelin Jr. discovered how enzymes called prolyl hydroxylases work with other proteins to destroy HIF-1α in the presence of oxygen. Cancer cells hijack this mechanism to support their growth. But HIF-1α is a challenging drug target, since transcription factors do not always have obvious places for small molecules to dock.Since

Segmental differences in pharmaceutical industry and its impact on supply chain performance

PurposePharmaceutical industry involves highly specialized business processes where strong research and development focus along with market differentiation and localization are the deciders of success. This has led to evolution of segments and complexities in supply chain. This paper aims to focus on segmental differences in supply chain performance of Indian Pharmaceutical firms.Design/methodology/approachThis paper measures supply chain performance of select segmental players of the pharmaceutical industry using financial metrics and supply chain operations reference (SCOR) key performance indicators through a five-year timeline. The best performance results are compared across the segments to identify unique performance features, if any. The sample results are validated through hypothesis testing methodology.FindingsThis paper has evidenced that the innovators segment is performing better in cash-to-cash cycle time and supply chain working capital productivity, whereas generics segment is doing better in distribution cost efficiency and total cost to serve aspects.Research limitations/implicationsThe paper is based on historical financial data of firms and measures the firm focused supply chain performance. The results may not be generalized in a global context but serve as a motivator for other researchers to take similar studies. The paper may further be analyzed with primary data of the firms to understand the segmental difference in customer focus supply chain performance measures.Practical implicationsThis paper has brought out important segmental supply chain performance features of the Indian pharmaceutical firms and identified segment-specific problems by integrating SCOR KPIs and financial metrics.Originality/valueThis paper has integrated both SCOR KPIs and financial metrics to provide unique insights on segmental differences in the performance behavior of pharmaceutical supply chain.

Linking Strategic Orientations, Dynamic Capabilities, and Firm Performance: Evidence from the Pakistani Pharmaceutical Industry

The paper aims to extend the resource-based view to dynamic capability view under dynamic environment, by investigating the effects of three strategic orientations (i.e., customer, competitor, and technology) on firm performance mediated through dynamic capabilities. A sample of 180 pharmaceutical firms of Pakistan was drawn using simple random sampling. Data was collected through a self-administrated questionnaire and analyzed using the variance-based structural equation modeling. The findings demonstrated that customer, competitor, and technology orientations have both a direct and indirect relationship with firm performance. The study offers Pakistani pharmaceutical firms a better comprehension of their strategic orientations and demonstrates how the alignment of strategic orientations with dynamic capabilities may result in better firm performance.

Research and development spending and technical efficiency: evidence from biotechnology and pharmaceutical sector

Set within the expenditure context of the global financial crisis (GFC), this paper explores how the research and development (R&D) expenditures of biotechnology and pharmaceutical companies affect their technical efficiency levels. A balanced panel of 149 US firms operating in the biotechnology and pharmaceutical sector (covering the period 2000–2017) was employed. Output-oriented partial frontier measures were used to measure the effect of R&D expenditure on firms’ technical efficiency levels. Findings suggest that company efficiency is an important contributor on the effects of R&D on productivity and efficiency. Result suggests that a relationship between technical efficiency and R&D expenditure exhibits a ‘U’-shape relationship. The estimated efficiency of biotechnology firms is higher compared to pharmaceutical firms driven by their higher R&D expenditure levels. We demonstrate that R&D expenditures are essential for firm efficiency. We posit that a threshold level for achieving optimal efficiency levels exist, which can be used to inform managerial and policy-making decisions at the firm level.

Biopiracy of Plant Resources and Sustainable Traditional Knowledge System in Africa

The relationship between plant resources and traditional communities in Africa is inseparable. For centuries, indigenous communities have been depending on their cultural innovations and practices for health and food. Plant resources are part of the traditional knowledge system of indigenous communities in Africa. Colonialism and the scramble for Africa led to plant resources being opened to bioprospecting by western scientists and multinational pharmaceutical firms. They engage in secluded locations around Africa in order to find ‘new drugs from exotic plants’ for profit-making or patent rights. The advent of technology has witnessed a lot of illegal exploitation and commercialization of plant resources (biopiracy). The traditional knowledge system is being eroded with disregard to the welfare of the owners of the knowledge to sustainably manage it. The paper looks at the challenges, the existing legal framework to appreciate if it’s adequate to ensure the sustainability of the traditional knowledge system in Africa.

The Complexity of Pharmaceutical Prices: An Economic Analysis

This article examines the complexity of pharmaceutical pricing. Specifically, list prices are often considerably higher than net prices. PBMs have considerable market power to obtain substantial discounts (rebates) from pharmaceutical companies which encourages higher list prices. In general the generic market work well. At issue is how much of the discounts are passed on to other stakeholders. High prices during market exclusivity or patent protection encourages R&D. Pharmaceuticals spend a large percentage of revenues on R&D, earn large profits which are somewhat overstated and take substantial risk. Many firms never make a profit. Drugs provide great value and increase the quality of life of patients. Since subscribers often change insurance companies, insurers have a shorter time horizon than pharmaceutical firms, which could lead to coverage issues. Policies to mitigate high drug prices include changes to PBM rebate practices, stricter patent approvals and reduction of barriers for generics and biosimilars.

Industrial modernisation through institutional upheaval in a transition economy

PurposeThe purpose of this paper is to examine the effects of Russian institutional upheavals on industrial development.Design/methodology/approachThe paper uses a longitudinal case study analysis of three Russian pharmaceutical firms exploring the role of state support in developing a self-sustained competitive innovation-dependent industry.FindingsRussia’s shock therapy transition to a newly liberalised economy the 1990s without a supportive institutional framework led to severe setbacks in its modernisation process. A weak institutional context was not conducive to development of its fledgling organisations. In late 2000s, Russian Government initiated large-ranging institutional support in favour of strategic industries. This resulted in a shift from short-term profit-seeking arbitrage strategies to long-term investment strategies towards vertical integration, R&D and human resource development. Findings indicate countries that wish to forge competitive industries need to develop a strong supportive institutional mechanism that allows targeted industries to modernise and compete on a global scale. To ensure the effectiveness of execution of strategic policies, coherent communication channels and collaboration between the industry and the state is necessary.Originality/valueWhile research on large emerging economies, such as China and India, is extensive, research on Russia and surrounding states is sparse. Most of the research on Russia is based around large resource-sector organisations. This study is novel in its uncovering various phases of development of an innovation-dependent industry.

Entry Into New Therapeutic Areas: The Effect of Alliance on Clinical Trials

BackgroundEntry into a new therapeutic area, that is, one in which a pharmaceutical firm lacks experience, is a considerable challenge for firms that need to overcome scientific and technological barriers. To address this issue, the present study aims to explore the potentiality of alliances in an empirical manner.MethodsFrom the clinical trials sponsored by 20 major pharmaceutical firms during 2008–2016 listed at ClinicalTrials.gov (n = 14,941 clinical trials), cases of entering a new therapeutic area for a pharmaceutical firm were extracted (n = 73), followed by statistical analyses to evaluate the effect of alliances in this regard.ResultsWe found that the average number of participating organizations in the cases of entering a new therapeutic area was significantly larger than that in the cases of entering an area in which firms had experience (P < .01), suggesting that alliance has a positive effect on new therapeutic entry for these pharmaceutical firms. Second, we found that the cases of partnering with nonindustrial or nongovernmental organizations (ie, universities, research institutes, hospitals, funding agencies, and others; n = 32 of the 73) were significantly associated with these new entry trials (adjusted odds ratio = 1.1, P < .05). Furthermore, we identified that 10 of the 32 clinical trials were associated with rare diseases, which is an overrepresentation compared to the occurrence in the universe (1015 of the 14,941; P < 10–5).ConclusionsThese findings strongly suggest the importance of alliances with diversified partners in new therapeutic entry and also provide a basis for further detailed investigation of key success factors for pharmaceutical firms.

Knowledge Sources and International Business Activity in a Changing Innovation Ecosystem: A Study of the Indian Pharmaceutical Industry

ABSTRACTThe Indian pharmaceutical industry has experienced rapid growth, becoming the world's largest provider of generic drugs, based on product and process innovation. The industry has undergone dynamic changes in recent decades, operating in a rapidly evolving environment affected by domestic and global policies; a key example of the latter is the TRIPS agreement. Taking an intellectual property perspective, we describe how changes in the innovation ecosystem have affected companies’ strategies related to international activity and accessing knowledge from both internal and external knowledge sources, during the transitional- and post-TRIPS periods (1995–2004 and 2005–2014, respectively). Combining intellectual property arguments with contextual aspects of the innovation ecosystem, we conjecture that, in the post-TRIPS period, externally-sourced knowledge will be more important than internally-sourced knowledge, for Indian pharmaceutical firms’ international business activity.