New drug development strategies: The differences between the initial plans and the final results

Abstract

According to the literature, R&D investments in the pharmaceutical industry do not corresponds equally to the number of developed new drugs. The literature indicates that companies do large acquisitions or merge in order to maintain their positions in the top of the industry and compensate the lack of innovative drugs in their pipeline.

The main goal of the first part of this research was to discover to what extent the pharmaceutical companies are in control over their R&D programmes. This was not investigated until know. A lack of control over their R&D programmes could be a cause of the lack of new drugs in their pipeline. If the companies appeared to have full control over their pipelines, the cause of the problem must be searched somewhere else. The first main research question investigated the control that large pharmaceutical companies have of their own R&D activities and the drugs and disease areas that are present in their pipeline. Therefore, a research population of six large pharmaceutical companies are investigated by means of archival analysis. The main research question was: What are the differences between the initial new drug R&D strategies and plans and the new drugs that appeared in the pipeline of large pharmaceutical companies in the period 2000 until 2009? The conclusion of the first main research question was that none of the six investigated companies was able to realise all its ambitions regarding to new drug development and served disease areas. In other words, the companies did not have full control over their pipelines. However, it appeared that transactions of knowledge and technologies are part of daily routines in for pharmaceutical companies. The border between daily routines to maintain the own competitive position, and attempts to compensate inefficiency and failures at the own R&D department is unknown.

The results of the first part show that a framework to investigate which factor influence the success of new drug R&D programmes was needed. Such a framework was not available in the literature so far. Therefore, the second part of this research investigated which factors influenced the success of the R&D programmes. A conceptual framework, based on the Five Phases model of Tidd (et al, 2001) and the Resource Based view of Barney (1991) was developed. In order to refine the conceptual framework, interviews with very experienced employees at three of the six investigated companies were conducted. The central research question was: What was the influence of the ‘ability to provide resources effectively’, ‘the ability to implement technology’, ‘dynamic capabilities’, and ‘possession of strategic resources’ on the success of new drug R&D programmes? Based on the analysis of the answers of the three conducted interviews it can be stated that each of the factors that are named in the second main research question contribute positively to the success of new drug R&D programmes at the investigated large pharmaceutical companies. However, the analysis of the answers on the interview questions indicate that on a more detailed level, some small refinements in the conceptual framework had to be made. The most important were that speed and managerial skills are decisive for the success of the R&D programme.

The main recommendation to improve this research is to investigate a larger research h population, especially for the second part of the research. Furthermore, future research needs to be done because the loose relation between R&D investments and R&D outcomes is a real problem. Future research needs to investigate the border between transactions of technology and compounds as normal routines and as attempt to compensate the own R&D. If there is more insight in the factors that influence the success of new drug R&D programmes, more patients can be helped.