IDEAS home Printed from https://ideas.repec.org/p/ssa/lemwps/2017-10.html
   My bibliography  Save this paper

The increasing role of contract research organizations in the evolution of the biopharmaceutical industry

Author

Listed:
  • Margherita Balconi
  • Valeria Lorenzi

Abstract

The role played in the last decades by contract research organizations (CROs) has been almost completely neglected by the economic and managerial literature. At most they are presented as firms performing routine clinical tasks, a portrait which is largely outdated and misleading. Thus the main objective of this paper is to highlight the evolution of the CRO segment of the biopharma industry, discuss the foundations of CROs' comparative advantage and underline the consequences of their growth for the effective functioning of the industry. We suggest that the increased role acquired by CROs in performing fundamental phases of R&D has made the anatomy of the biopharma system more functional. In fact even if the turbulence and mortality of IP-based biotech firms is extremely high, if they rely to a great extent on CROs, the experience acquired to carry out their projects - which mostly fail - does not get lost but cumulatively enhances CROs' capabilities, a resource that can be tapped to carry out further projects.

Suggested Citation

  • Margherita Balconi & Valeria Lorenzi, 2017. "The increasing role of contract research organizations in the evolution of the biopharmaceutical industry," LEM Papers Series 2017/10, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    • Handle: RePEc:ssa:lemwps:2017/10
    as

    Download full text from publisher

    File URL: http://www.lem.sssup.it/WPLem/files/2017-10.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kirk Monteverde, 1995. "Technical Dialog as an Incentive for Vertical Integration in the Semiconductor Industry," Management Science, INFORMS, vol. 41(10), pages 1624-1638, October.
    2. Michael G. Jacobides & Lorin M. Hitt, 2005. "Losing sight of the forest for the trees? Productive capabilities and gains from trade as drivers of vertical scope," Strategic Management Journal, Wiley Blackwell, vol. 26(13), pages 1209-1227, December.
    3. Michael G. Jacobides & Sidney G. Winter, 2007. "Entrepreneurship and Firm Boundaries: The Theory of A Firm," Journal of Management Studies, Wiley Blackwell, vol. 44(7), pages 1213-1241, November.
    4. Constance E. Helfat, 2015. "Editor's Choice Vertical firm structure and industry evolution," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 24(4), pages 803-818.
    5. Stuart, Toby E. & Ozdemir, Salih Zeki & Ding, Waverly W., 2007. "Vertical alliance networks: The case of university-biotechnology-pharmaceutical alliance chains," Research Policy, Elsevier, vol. 36(4), pages 477-498, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Postigo, Antonio, 2023. "The Economics and Actors in Vaccine Research and Development," EconStor Open Access Book Chapters, in: From Lab to Jab: Improving Asia and the Pacific’s Readiness to Produce and Deliver Vaccines, pages 17-42, ZBW - Leibniz Information Centre for Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Geoffrey M. Hodgson, 2010. "Limits of Transaction Cost Analysis," Chapters, in: Peter G. Klein & Michael E. Sykuta (ed.), The Elgar Companion to Transaction Cost Economics, chapter 28, Edward Elgar Publishing.
    2. Rahul Kapoor, 2013. "Persistence of Integration in the Face of Specialization: How Firms Navigated the Winds of Disintegration and Shaped the Architecture of the Semiconductor Industry," Organization Science, INFORMS, vol. 24(4), pages 1195-1213, August.
    3. Peter G. Klein & Michael E. Sykuta (ed.), 2010. "The Elgar Companion to Transaction Cost Economics," Books, Edward Elgar Publishing, number 4136.
    4. Thomas Hutzschenreuter & Florian Gröne, 2009. "Changing Vertical Integration Strategies under Pressure from Foreign Competition: The Case of US and German Multinationals," Journal of Management Studies, Wiley Blackwell, vol. 46(2), pages 269-307, March.
    5. Stephan Manning & Silvia Massini & Carine Peeters & Arie Y. Lewin, 2018. "The changing rationale for governance choices: Early vs. late adopters of global services sourcing," Strategic Management Journal, Wiley Blackwell, vol. 39(8), pages 2303-2334, August.
    6. Michael G. Jacobides, 2008. "How Capability Differences, Transaction Costs, and Learning Curves Interact to Shape Vertical Scope," Organization Science, INFORMS, vol. 19(2), pages 306-326, April.
    7. Aseem Kaul, 2013. "Entrepreneurial Action, Unique Assets, and Appropriation Risk: Firms as a Means of Appropriating Profit from Capability Creation," Organization Science, INFORMS, vol. 24(6), pages 1765-1781, December.
    8. Manning, Stephan, 2017. "The rise of project network organizations: Building core teams and flexible partner pools for interorganizational projects," Research Policy, Elsevier, vol. 46(8), pages 1399-1415.
    9. Gamal Atallah, 2002. "Production Technology, Information Technology, and Vertical Integration Under Asymmetric Information," Working Papers 0203EClassification-JEL: , University of Ottawa, Department of Economics.
    10. Wolfgang Burr, 2003. "Fundierung von Leistungstiefenentscheidungen auf der Basis modifizierter Transaktionskostenansätze," Schmalenbach Journal of Business Research, Springer, vol. 55(2), pages 112-134, March.
    11. Rogerio S. Victer, 2020. "Connectivity knowledge and the degree of structural formalization: a contribution to a contingency theory of organizational capability," Journal of Organization Design, Springer;Organizational Design Community, vol. 9(1), pages 1-22, December.
    12. Wernerfelt, Birger, 2003. "Indirect Adjustment-Costs Under Alternative Coordination Regimes," Working papers 4336-01, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    13. Gianluigi Giustiziero & Tobias Kretschmer & Deepak Somaya & Brian Wu, 2023. "Hyperspecialization and hyperscaling: A resource‐based theory of the digital firm," Strategic Management Journal, Wiley Blackwell, vol. 44(6), pages 1391-1424, June.
    14. Ding, Waverly & Choi, Emily, 2008. "Divergent Paths or Stepping Stones: A Comparison of Scientists’ Advising and Founding Activities," Institute for Research on Labor and Employment, Working Paper Series qt4907j25p, Institute of Industrial Relations, UC Berkeley.
    15. Wong H & Wong R & Leung S, 2018. "Relationship Marketing in Tertiary Education: Empirical Study of Relationship Commitment and Student Loyalty in Hong Kong," International Business Research, Canadian Center of Science and Education, vol. 11(2), pages 205-221, February.
    16. Alessia Pisoni & Alberto Onetti & Luciano Fratocchi & Marco Talaia, 2010. "Managing R&D activities in the Italian red biotech industry. A comparison between Italian independent firms and multinational companies," Economics and Quantitative Methods qf1003, Department of Economics, University of Insubria.
    17. Najda-Janoszka, Marta, 2017. "Industry Transition - Challenges for Value Capture," MPRA Paper 81919, University Library of Munich, Germany.
    18. Hervas-Oliver, Jose-Luis & Lleo, María & Cervello, Roberto, 2017. "The dynamics of cluster entrepreneurship: Knowledge legacy from parents or agglomeration effects? The case of the Castellon ceramic tile district," Research Policy, Elsevier, vol. 46(1), pages 73-92.
    19. Gotsopoulos, Aleksios & Pitsakis, Konstantinos, 2024. "United we stand? Organizational groups and spinoff mortality in the context of academic entrepreneurship," Journal of Business Venturing, Elsevier, vol. 39(1).
    20. Thierry BURGER-HELMCHEN, 2008. "Plural-entrepreneurial activity for a single start-up: a case study," Working Papers of BETA 2008-01, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.

    More about this item

    Keywords

    Evolution of industries; R&D outsourcing; tacit knowledge; biopharma industry;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ssa:lemwps:2017/10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/labssit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.