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Drug R&D Management: Practitioners' Challenges and Knowledge Needs
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Industrial Economics and Management (Div.).
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.).ORCID iD: 0000-0001-9277-0288
2010 (English)Report (Other academic)
Abstract [en]

R&D productivity in the pharmaceutical business has gradually decreased during the last decades. While companies are spending more on R&D, fewer drugs are reaching the market. It is said that the cost of bringing a successful drug to the market is now $1 billion, which includes all failure drugs. At the same time, governmental regulations for drugs development have become tighter. Companies are therefore desperately trying to find new ways to develop more innovative drugs more effectively. There is a growing need for more knowledge about Drug R&D Management in the industry, which is the reason for KTH Industrial Economics and Management initiating a research program in this field. The present study is a feasibility study of this research endeavor. It outlines the scope of the field and explores areas for further study. Anchored in interviews with key industrial actors, the aim is to identify which organizational challenges practitioners are presently facing for successful drug R&D management. Four themes of challenges within the business have been identified. These are: Specialization within the R&D Process – There is a trend that different actors specialize within the innovation process of developing new drugs. The concept is to source activities to organizations that have the best capabilities. What are the consequences of this business model? What is the core competence of different actors? Balancing Freedom and Control in R&D Operations – R&D by definition, comprises activities with unknown outcomes. Work in projects most probably takes trajectories that were not originally thought of. Typically the most suitable individuals for performing such activities are scientists with a deep specialization within the field of research. How are freedom and control of work balanced within R&D? What type of control is most suitable? How can scientists be managed? Resource Allocation and Project Portfolio Management – Projects in a project portfolio are dependent on each other and on their environment. The ecology in which a project lives will determine how it is evaluated and financed, and how risk-willing its owners are. There is a need of knowledge to describe how different project environments are organized. Organizing for Knowledge Exchange – Knowledge in biosciences is growing exponentially. Managing knowledge is therefore crucial, but how to do it successfully is the question. Working in big collaborative networks requires companies to manage knowledge outside the boundaries of the firm. There is also a need to bring in knowledge from other industries. The themes can encompass different theoretical disciplines - from a strategic point of view to a cognitive aspect of innovation. This study argues for a comparative multiple case study approach focusing on the preconditions and business logics of different R&D organizations. The cases should look into the different organizational domains of Biotech firms and Big Pharma multinationals, comparing the two business logics and strategies. Innovation in the context of single firms in the pharmaceutical industry can thus be explored and give rise to knowledge through examples of practical problem solving and methodology in drug R&D management.

Place, publisher, year, edition, pages
2010. , 37 p.
Trita-IEO, ISSN 1100-7982 ; 2010:08
Keyword [en]
Innovation, Drug Development, Managerial Challenges
National Category
Business Administration
URN: urn:nbn:se:kth:diva-63437ISBN: 978-91-7415-765-9OAI: diva2:482297
QC 20120126Available from: 2012-01-26 Created: 2012-01-23 Last updated: 2012-01-26Bibliographically approved

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