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Alternative strategies for investing in corporate R&D (on the example of the global pharmaceutical industry)

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  • О. A. Yeremchenko

Abstract

During the last ten years, the largest pharmaceutical manufacturers significantly changed their approaches to the formation of their own strategies for capturing and retaining the leading positions in global markets. One of the key prerequisites was a decline in the return on investment in R&D: if in 2010 among the top 12 pharmaceutical companies of the world this indicator was 10,1%, then in 2017 it fell to 3,2%. At the same time, the cost of developing and launching new medicines has increased: from $1,2 billion to $2 billion in 2010–2017.The article analyzes the main reasons for the transformation of the strategies of the Big Pharma companies. It has been suggested that, in the context of a decline in payback in R&D, increased competition, a fall in public expenditure on the purchase of pharmaceuticals, and tightening of regulatory requirements, it is advisable for domestic companies to reorient the creation of corporate venture funds and investing in start-ups, and actively use the mergers and acquisitions strategy.

Suggested Citation

  • О. A. Yeremchenko, 2018. "Alternative strategies for investing in corporate R&D (on the example of the global pharmaceutical industry)," Economics of Science, Delo Publishing house, vol. 4(4).
    • Handle: RePEc:abz:journl:y:2018:id:138
    DOI: 10.22394/2410-132X-2018-4-4-309-317
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    References listed on IDEAS

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    1. Yasin Ç?LHOROZ & Cuma SON?UR & Mehmet GÖZLÜ & Murat KONCA, 2016. "Mergers And Acquisit?ons In Pharmaceutical Industry As A Growth Strategy: An Investigation Upon Practice," Proceedings of International Academic Conferences 4006562, International Institute of Social and Economic Sciences.
    2. Yasin Ç?LHOROZ & Cuma SON?UR & Mehmet GÖZLÜ & Murat KONCA, 2016. "Mergers And Acquisit?ons In Pharmaceutical Industry As A Growth Strategy: An Investigation Upon Practice," International Journal of Business and Management, International Institute of Social and Economic Sciences, vol. 4(3), pages 1-12, August.
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      More about this item

      JEL classification:

      • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
      • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
      • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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