The Changing Nature of Pharmaceutical R&D - Opportunities for Asia?

Jörg Mahlich () and Thomas Roediger-Schluga ()

No 1, Research Memorandum from Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT)

Abstract: During the 1990''s, the pharmaceutical R&D process has witnessed tremendous technological changes. The emergence of new tools like ''combinatorial chemistry'', ''high throughput screening'' and the in-creasing use of computer-aided in silico experiments has led to significant improvements of research efficiency. This paper discusses the economic impact of this trend. It is argued that the resulting radical improvements in R&D productivity have lowered the minimum efficient scale in pharmeceutical research. As a consequence, the main bottleneck in pharmaceutical research has shifted from the mechanical act of synthesising and screening a sufficient number of active compounds to scientific excellence. Empirical finding indicate that the latter can more easily be achieved in smaller, highly focused firms. Accordingly, the most efficient way to currently conduct pharmaceutical R&D may be a new ''division of labour'' in research between small, highly specialised firms conducting research and large firms focusing on the development, testing, and marketing or new drugs. This reopens a ''window of opportunity'' for Asian pharmaceutical firms who had lost out in the previous race to ever increasing size.

Keywords: economics of technology (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (1)

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