Pharmaceutical Firms Research Articles

Internal R&D and Acquisition Performance of Chinese Pharmaceutical Firms: Moderation Effect of Acquisition Motive and Corporate Ownership

Although corporate capability has been recognized as a key factor affecting corporate acquisition performance, the role of R&D capability in acquisition performance has not been fully explained. The aim of this paper was to research the impact of internal R&D on acquisition performance according to a sample of 215 acquisitions of Chinese listed pharmaceutical companies from 2012 to 2016. First, it was found that R&D has a significant negative effect on acquisition performance. Furthermore, it was confirmed that the acquisition motive and the ownership of the acquiring firm have a moderating effect on the relationship between R&D and acquisition performance. Compared to non-technical acquisitions, the negative effect of internal R&D on acquisition performance was reduced for technical acquisitions. Compared with non-state-owned-enterprise acquisition, the negative effect of internal R&D on the acquisition performance of state-owned enterprises was weakened. Our study enriches the research of the path dependence theory on the acquisition performance of enterprises and also the interpretation of acquisition performance on the basis of internal and external innovation and the institutional theory.

Understanding the emergence of redistributed manufacturing: an ambidexterity perspective

This paper extends operations strategy theory on efficiency and flexibility trade-offs to the emergent phenomenon of redistributed manufacturing (RDM). The study adopts a multiple-case design including five small and five large pharmaceutical firms. We propose that organizations can gain the efficiency benefits of centralized manufacturing and the flexibility advantages of RDM by building an ambidexterity capability. To build such a capability, large firms can structurally partition their manufacturing and supply management functions, with one sub-unit managing centralized production and the other RDM. Smaller enterprises can build an ambidexterity capability by creating the right organizational context, where multi-skilled workers switch between efficient and flexible tasks. This paper contributes to theory by explaining the emergence of RDM using an organizational ambidexterity lens, laying the groundwork for new theory development in the field. We provide managers with a practical example of how to build an ambidexterity capability to realize flexibility and efficiency advantages.

The Role of Female Directors in the Boardroom: Examining Their Impact on Competitive Dynamics

This study contributes simultaneously to research on women board members and competitive dynamics by investigating two unresolved research questions: What is the effect of female directors on the firm’s competitive repertoire? Under what conditions is this effect more pronounced? Leveraging the “Awareness-Motivation-Capability” (AMC) framework, we predict that having women on the board of directors should impact the complexity, heterogeneity, and volume of the firm’s competitive moves. Relying upon a sample of U.S. pharmaceutical firms for the years 2000 to 2017, we find that adding female directors on the board positively affects the complexity and volume of a firm’s competitive moves, but negatively impacts the heterogeneity of competitive actions. In addition, the presence of a female CEO moderates these effects, leading to more complex competitive actions and increased volume. Thus, our study lends a greater understanding of how female board members influence competitive dynamics and shape the strategic direction of the firm.

Knowledge breadth and depth development through successful R&D alliance portfolio configuration: An empirical investigation in the pharmaceutical industry

Organizational ambidexterity literature has emphasized the importance for firms to engage in dual activities of exploration (knowledge breadth) and exploitation (knowledge depth). However, little research has been done regarding what strategies firms need to adopt in order to achieve these two competing goals. This paper seeks to understand how different R&D alliance portfolio configuration strategies affect firms' ability to develop knowledge breadth and knowledge depth. The central argument is that different R&D alliance portfolio configuration strategies will produce different levels of knowledge structural benefit and relational capital benefit. A firm's preferences for different types of R&D alliance partners influence both the scope of external knowledge it is exposed to (knowledge breadth) as well as its ability to absorb and learn from its partners (knowledge depth). Using a panel data of 64 pharmaceutical firms over 15 years, our empirical results largely support the proposed hypotheses.

Survey of particle production rates from process activities in pharmaceutical and biological cleanrooms

The lack of measurement data on particle generation rates from process activities for companies involved in the life sciences industry, such as pharmaceutical and biotechnology firms, has the potential to undermine cleanroom design, particulate concentration control, and energy efficiency. Based on this situation, this paper surveys the particle production rates from process activities in pharmaceutical and biological cleanrooms using field measurements for the particle sizes of interest (0.3 µm, 0.5 µm, and 1 µm). The measured and collected data were correlated to the surveyed activities to obtain a range of particle generation rates for different cleanroom operations. In terms of the recommended ACH values and measured ACH values, the results indicate that although most cleanrooms operate below the recommended ranges, in most cases they satisfy or exceed the required ISO standard cleanliness levels. In addition, the particle generation rates are process-specific and that suggests process-specific guidelines for different cleanrooms will help engineers, owners and contractors arrive at a better design solution. It is worth mentioning that nonperfect mixing of airflow and particles was observed in several cleanrooms, resulting in large variances in the measurements at different sampling locations. This observation suggests that a correction factor might be needed for the ventilation effectiveness for Class 7 and 8 cleanrooms. Although the determination of the correction factor is beyond the study of this paper, the data presented in this paper are critical to understand the severity of the non-perfect mixing in Class 7 and 8 cleanrooms and thus provides insights on the determination of the correction factor. The research reported in this paper was conducted through the ASHRAE 1399 research project, with a focus on developing scientific cleanroom design guidelines that can assist engineers, owners, and contractors to arrive at appropriately sized and efficient cleanroom systems.

Drug repositioning: Achievements, advancements and barriers

Drug repositioning: Achievements, advancements and barriers - IJCAAP- Print ISSN No: - 2581-5555 Online ISSN No:- 2456-9542 Article DOI No:- 10.18231/j.ijcaap.2019.003, IP International Journal of Comprehensive and Advanced Pharmacology-IP Int J Compr Adv Pharmacol

Opening the black box: Unpacking board involvement in innovation

Corporate governance research suggests that boards of directors play key roles in governing company strategy. Although qualitative research has examined board–management relationships to describe board involvement in strategy, we lack detailed insights into how directors engage with organizational members for governing a complex and long-term issue such as product innovation. Our multiple-case study of four listed pharmaceutical firms reveals a sequential process of board involvement: Directors with deep expertise govern scientific innovation, followed by the full board’s involvement in its strategic aspects. The nature of director involvement varies across board levels in terms of the direction (proactive or reactive), timing (regular or spontaneous), and the extent of formality of exchanges between directors and organizational members. Our study contributes to corporate governance research by introducing the concept of board behavioral diversity and by theorizing about the multilevel, structural, and temporal dimensions of board behavior and its relational characteristics.

Leveraging board talent for innovation strategy

PurposeHuman capital has been traditionally viewed in terms of how an individual’s investment in knowledge, skills and abilities can lead to higher pay or promotions. More recently, human capital has been regarded as a unit-level resource using the term “human capital resources” to consider the aggregate effects of human capital. The purpose of this paper is to examine the collective human capital present in a firm’s board of directors as a valuable resource leading to superior firm outcomes.Design/methodology/approachThe study examined the effects on firm innovation of the scientific expertise of corporate directors, average board tenure and the presence of a firm’s founder on the board. Data from a sample of pharmaceutical firms were analyzed with the dependent variable, innovation, measured as patent applications and both individual and unit-level human capital measures of the predictor variables.FindingsThe results show that the presence of a founder-director is positively related to innovation and more pronounced when combined with the board’s scientific expertise. Board tenure shows a relationship to innovation and is more evident in combination with the board’s aggregate level of scientific expertise. The effect of directors’ scientific expertise is also greater when measured at the board level of scientific expertise.Research limitations/implicationsFuture studies should examine these relationships within a broader context extending the research to other industries thereby incorporating wider variation in both the antecedents and measures of innovation. In addition, future studies might investigate a likely non-monotonic relationship of board tenure with strategic outcomes, recognizing the non-linear nature of effects of board tenure.Practical implicationsIn addition to the theoretical and empirical implications, this research may also inform practicing managers charged with constituting their boards of directors and provide some guidance for the recruitment and retention of board members. The research may also assist top managers and investors in knowing when the presence of a founder on the board is useful and supportive of the firm’s strategic direction.Originality/valueThe study extends scholarly understanding of human capital theory beyond the top management team to boards of directors demonstrating the importance not only of directors’ individual capital but also how it combines with that of other directors. Moreover, it enhances understanding of board characteristics beyond the bounds of demographic characteristics to show that additional qualities affect firm strategy. This research also informs managers, boards and investors how boards might be more effectively constituted to impact firm strategy.

Involving patients in the evaluation of health technologies at the French National Authority for Health (HAS)

The French National Authority for Health (HAS) wanted to establish a review about the first months of its new patient involvement process dedicated to drug and medical device evaluation (which began in November 2016). This process relies on written submissions from patient organizations (POs). Different sources of information were used: data monitoring, comparison with other contribution processes in HAS, sharing of practices with other Health Technology Assessment (HTA) bodies, feedback discussions with POs, pharmaceuticals firms, and evaluators (internal reviewers and members of Appraisal Committees). There were contributions for 25 drugs among 75 opened to contribution during the first six months. The HAS Board defined three adjustments in September 2017 to improve the procedure: increasing the time for POs to contribute, publishing the contributions on the HAS website, improvement of the presentation of the submission to the committee. Some further necessary reflections were identified such as the information available to POs to elaborate their submission, or the exact nature of intellectual uptake of the contribution during the different stages of assessment/appraisal elaboration. The different methods proved to be complementary and helped to define adjustments and clarify some future stakes for this new procedure. Data on this kind of process must be routinely collected. Comparisons with other involvement processes and discussions with stakeholders are rather used in dedicated studies or improvements projects.

High-spec mass spec

Big pharmaceutical firms have to make big-risk investments when inventing new drugs. But one physicist’s new spectroscopy tool could radically change that, as Jon Cartwright reports

Formation advertising strategies of Ukrainian pharmaceutical companies with the use of imitative model-simulators

The purpose of the article is to study the various processes in the development of advertising strategies of pharmaceutical companies, based on using tools in a multilevel simulation platform – AnyLogic. From this, the specifics of advertising companies in the pharmaceutical market are determined. The study takes into account the influence of various factors of the market environment on the functioning of pharmaceutical firms, their acceptance of specific advertising strategies, and forecasting the results of their implementation in uncertain conditions. The proposed imitative model-simulator is used to prepare advertising strategies for enterprises in the pharmaceutical industry. The performance of the model is displayed through the results of situational simulation experiments, using the leading Ukrainian Pharmaceutical Company OJSC Farmak as an example. The processes of carrying out experiments of different types and the possibilities of parametric adjustment to the experiments are demonstrated. The model is proposed to be used in the process of making strategic decisions and during operational monitoring of pharmaceutical products by an advertising company. Thanks to the modularity and sufficiency of the model, it is possible to customize it to specific industry enterprises.

Advertising efficiency and profitability: Evidence from the pharmaceutical industry

B2B firms spend considerable sums of money on promotional activities to promote their products and to build brand equity. An increasing proportion of this spending is being devoted to direct to end-user (DTE) advertising in an effort to pull end-users towards their products as a complement to their push promotional activities. This is particularly true for US-based pharmaceutical firms following the deregulation of DTE advertising. This trend suggests the necessity to investigate how efficiently DTE advertising expenditure is being managed, and to ascertain whether the level of efficiency has any impact on profitability. This study examined the level of DTE advertising efficiency for a sample of US-based pharmaceutical firms and went on to investigate the impact of the efficiency level on firm profitability. The findings of the study demonstrate that DTE advertising efficiency does vary between firms and, furthermore, that the higher the level of efficiency, the better is firm profitability. These results are robust to alternative measures of firm profitability, specifically, return on assets (ROA), return on equity (ROE), gross profit margin (GPM) and net profit margin (NPM).

Is Market Orientation a Driver for 'Radical Innovation'? An Insight from the Pharmaceutical Industry

This study investigates market orientation's dimensions (i.e., customer orientation, competitor orientation and technological orientation) as antecedents to radical innovation in an application to the pharmaceutical industry. Numerous researchers in strategic orientation literature have identified the importance of those orientations on the bottom line of companies across industries. While main findings have validated the positive significant relationship between strategic orientations and (1) firm's ability to innovate and (2) innovation success, one research question didn't receive much attention: Would market orientation lead to higher introduction of radical innovations? While we discuss the previous contradictory findings in that area, we investigate the pharmaceutical industry using the ‘big pharma’ sample in order to control for one of the most eminent limitation of innovation measurement across industries, which is retrospective and self biased report (Price and Mueller, 1986). In attempt to prove the positive relationship between market orientation and radical innovation, we use a panel data for the period 2005-2011 (start and end year included), and classify the innovations of the big pharma companies as per Sorescu, Chandy and Prabhu (2003) framework that segments pharmaceutical innovation into four different categories: incremental innovation, market breakthrough, technological innovation, and radical innovation. We code market orientation's dimensions of our sample using the methodology of Noble, Sinha and Kumar (2002) in coding letters to shareholders. We introduced two variables, R&D efficiency and R&D and marketing cooperation using Data Envelopment Analysis and showed their moderating effects on the relationship between market orientation and radical innovation. We ensured that our sample of pharmaceutical firms is homogeneous and that some environmental conditions specific of the pharmaceutical industry are controlled for. After running a panel data regression with random effect we find no significant relationship between market orientation and the first two levels of innovation (i.e., incremental innovation and market breakthrough). Instead, we find a positive and significant relationship between technological orientation and the third level of innovation (i.e., technological breakthrough, p < .05) and a positive and significant effect of customer orientation and technological orientation on the fourth level of innovation, which is radical innovation (p < .05 and p < 0.01 respectively). Competitor orientation has not significant effect on any level of innovation. We discuss our findings and conclude with the importance of market orientation in the pharmaceutical industry which innovations are vital for societal and human welfare. We develop a final chapter of managerial implications through concretized advices for managers and decision makers, while mentioning the limitations of our work that are present mainly in the generalizability of our findings on both intra and across industry levels.

Factors influencing community pharmacists’ recommendation of over-the-counter medications in four Vietnam cities

Purpose: To determine the factors influencing the recommendation of over-the-counter (OTC) medicines to patients by community pharmacists in Vietnam.Methods: The study was conducted at community pharmacies in Vietnam, from June 10 to October 30, 2017. A final data set for analysis of 422 questionnaires was completed by community pharmacists from four different cities in Vietnam. Exploratory factor analysis was used to determine potential factors underlying a set of 20 questions related to the research topic. The association among the obtained factors and between the obtained factors and the pharmacists’ demographics were determined by applying the Mann-Whitney U test and the Kruskal-Wallis test.Results: Using factor analysis the current study identified five factors, accounting for 61.53 % of the variance of the study, including customer, economic, professional, brand, and product. The product factor was found to have the most significant influence on pharmacists’ recommendation of all the factors (p < 0.001).Conclusion: There are five major factors influencing the decision-making process for the selection of OTC medicines by community pharmacists in Vietnam. These findings could be useful for pharmaceutical firms in the adaptation of product development and pharmaceutical marketing.Keywords: Community pharmacist, Over-the-counter medicine, Exploratory factor analysis, Medicine recommendation

Drugmakers post strong results

Drug company executives had a reassuring message for their stakeholders when reporting year-end earnings: we’re doing just fine. Revenues and earnings increased for most major pharmaceutical firms in 2018. And during conference calls with investors, many companies forecast similar or increased revenues for 2019 as well. The positive outlook comes at a time when the Trump administration has publicly shamed drug companies for price gouging. The US Department of Health and Human Services has proposed forcing companies to disclose drug prices during television ads, and President Donald J. Trump has even suggested that the US set limits on drug prices on the basis of what European countries pay. Although tough talk from President Trump has shaken the industry before, in the most recent string of earnings conference calls, executives seemed unfazed by the political pressure. Instead, they emphasized drug pipelines stocked with increasingly complex and expensive medicines. For many companies,

Political connections and strategic choices of emerging market firms

PurposeThe purpose of this paper is to investigate the importance of political connections in the emerging market context.Design/methodology/approachA case study analysis of three Russian pharmaceutical firms is conducted to uncover how they performed through the Russian transition – the institutional upheaval of the 1990s – and the ongoing state-led industrialization.FindingsIn the early years of transition, firms heavily rely on political networking to gain legitimacy and fill institutional voids. As institutions strengthen, the need for political networking is being substituted by arm’s length networking. Strengthening of institutions also results in a more stable business environment, evolving firms’ strategies from short-term core competency concentration to long-term innovative visions.Research limitations/implicationsFirms operating in the Russian, Commonwealth of Independent States and some other Eastern European state domains must be wary of complex ties that are prevalent in these countries and often can assist or hinder firm performance. Although formal institutions strengthen arm’s length networks, a close cooperation between strategic firms and the state remains.Originality/valueThe paper proposes two phases of the Russian transition and provides a taxonomy of strategic choices of Russian firms during the transition. Further, the paper describes the key institutional developments in the two phases of the Russian transition. Finally, a framework of political connections and their role in business operations in the two phases of the transition is provided.

Institutional investors and medical innovation

In this research paper, we investigate if institutional investors influence corporate innovation in the US pharmaceutical industry. We hand collect unique datasets from the Food and Drug Administration (FDA), including drug patents, drug approvals, medical device approvals, and Phase I-II-III drugs under clinical testing. We find that higher institutional ownership has a positive, causal effect on firm innovation. We document that institutional ownership increases the number of FDA approved products. Then, we examine the innovation quality and find that institutional ownership reduces the likelihood of both drug recalls and market withdrawals. Our results investigate possible underlying mechanisms through which institutional investors provide faster and more frequent innovation outcomes: Institutional holdings act as active monitors by providing insurance for firm executives against innovation failures. Our article sheds new lights on the real effects of institutional investors on pharmaceutical firms’ innovation.

Effect of the public disclosure of industry payments information on patients: results from a population-based natural experiment.

ObjectiveTo determine the effect of the public disclosure of industry payments to physicians on patients’ awareness of industry payments and knowledge about whether their physicians had accepted industry payments.DesignInterrupted time series with comparison group (difference-in-difference analyses of longitudinal survey).SettingNationally representative US population-based surveys. Surveys were conducted in September 2014, shortly prior to the public release of Open Payments information, and again in September 2016.ParticipantsAdults aged 18 and older (n=2180).Main outcome measuresAwareness of industry payments as an issue; awareness that industry payments information was publicly available; knowledge of whether own physician had received industry payments.ResultsPublic disclosure of industry payments information through Open Payments did not significantly increase the proportion of respondents who knew whether their physician had received industry payments (p=0.918). It also did not change the proportion of respondents who became aware of the issue of industry payments (p=0.470) but did increase the proportion who knew that payments information was publicly available (9.6% points, p=0.011).ConclusionsTwo years after the public disclosure of industry payments information, Open Payments does not appear to have achieved its goal of increasing patient knowledge of whether their physicians have received money from pharmaceutical and medical device firms. Additional efforts will be required to improve the use and effectiveness of Open Payments for consumers.

Start-up funding breaks records

Last year was a good one for start-ups seeking financing, and it was an especially good year for firms in pharmaceuticals and biotechnology. Venture capitalists sank $131 billion into US-based start-ups in 2018; pharma and biotech start-ups attracted $17.4 billion, or 13.3% of the total. Both sums set records, according to the National Venture Capital Association and PitchBook, a financial data–crunching firm. Total venture investment in 2018 broke the $100 billion high set during the dot-com boom in 2000. And the pharma and biotech category easily broke the record it set last year, when firms raised $11.8 billion. Overall, venture investors struck 8,948 funding deals in 2018. By far, the largest category was software, which accounted for nearly 42% of all deals. A miscellaneous category came in second with 1,973 deals, followed by the pharma and biotech sector with 720. Most categories saw a modest decline in the number of

Cancer Biology Aspects of Computational Methods & Applications in Drug Discovery.

Cancer is one of the most debilitating diseases worldwide; even though advances in molecular and cellular biology have contributed to the decline of mortality associated with cancer, the procedure of drug discovery and development of cancer are time-consuming and expensive. However, with computer-aided drug discovery (CADD) techniques, pharmaceutical firms can save production costs and reduce the time of introducing effective anticancer drugs for clinical trials. CADD strategies like structure-based drug designing, ligandbased drug designing, and combined structure-based and ligand-based approaches also have the advantage of identifying target sites and discovering active compounds with high affinity for the target sites. In this article, research carried out on cancer biology aspect of the computational approaches in drug discovery technology have been reviewed. The main objective of the study is to identify the potential causes and the development of the cancer. In addition to this, its recovery has been discussed briefly. Our findings indicate that only a few studies have been carried out regarding this area. Hence, it is recommended that further researches should be conducted on the computational methods for identifying candidate drugs for breast, pancreatic, colon, prostate, and other types of cancer.