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Research and development productivity map: visualization of industry status.
H Shimura1, S Masuda, H Kimura
1Pharmaco-Business Innovation Laboratory, Graduate School of Pharmaceutical Sciences, The University of Tokyo, Tokyo, Japan.
Journal of Clinical Pharmacy and Therapeutics
|January 21, 2014
Summary
Pharmaceutical companies with lower research and development (R&D) efficiency are more prone to industry consolidation. Poor R&D effectiveness also led to acquisitions or business model changes for some firms.
Area of Science:
- Pharmaceutical industry analysis
- Business strategy and economics
Background:
- Declining research and development (R&D) productivity is a significant concern in the pharmaceutical sector.
- This decline is linked to industry consolidation and has drawn scholarly attention.
Purpose of the Study:
- To visualize pharmaceutical industry R&D productivity using an R&D productivity map.
- To investigate the relationship between decreased R&D productivity and industry consolidation.
Main Methods:
- R&D productivity was measured by decomposing it into R&D efficiency and R&D effectiveness.
- Scores were calculated using a two-stage data envelopment analysis (DEA).
- A multiple regression model analyzed the link between DEA scores and merger/acquisition data.
Main Results:
- Companies with lower R&D efficiency scores demonstrated a higher likelihood of engaging in consolidation.
- Three US pharmaceutical companies with the lowest R&D effectiveness were either acquired or altered their business strategies.
Conclusions:
- The R&D productivity map effectively visualizes and identifies behavioral commonalities among companies.
- This tool can aid in monitoring and improving overall industry R&D productivity.
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