- 06 Jul 2017
- Working Paper Summaries
Do All Your Detailing Efforts Pay Off? Dynamic Panel Data Methods Revisited
Personal selling in the form of detailing to physicians is the main go-to-market practice in the pharmaceutical industry. This paper provides a practical framework to analyze the effectiveness of detailing efforts. The method and empirical insights can help firms allocate sales-force resources more efficiently and devise optimal routes and call-pattern designs.
- 26 Jul 2016
- Working Paper Summaries
The Impact of the Entry of Biosimilars: Evidence from Europe
Biosimilars are large-molecule drugs that, while not an exact copy of already-approved large-molecule drugs, have been shown to be therapeutically equivalent. Much like generic drugs, which become available when a small-molecule drug goes off patent, biosimilars are lower in cost than their reference products and present an opportunity for savings when large-molecule drugs’ patents expire. Biosimilars have been available in the United States only since 2015 but have been regulated, approved, and sold in Europe for over a decade. This paper examines the European experience to help inform policy design and institutional choices for the United States. Topics covered include the entry of distributors and unique products; predictors of average product prices following biosimilar competition; and penetration of biosimilars as a share of total sales.
- 11 Nov 2015
- Working Paper Summaries
Public R&D Investments and Private-sector Patenting: Evidence from NIH Funding Rules
By tracing the often-circuitous path from National Institutes of Health (NIH) funding to patented innovations, this research examines the effects of public science on private sector innovation in the life sciences.
- 24 Jul 2014
- Op-Ed
Reform Tax Law to Keep US Firms at Home
The flood of US corporations relocating to other countries is a hot topic in Congress. In recent testimony before the Senate Committee on Finance, Mihir Desai provided possible solutions around rethinking corporate tax and regulatory policy. Open for comment; 0 Comments.
- 12 Mar 2014
- Research & Ideas
Entrepreneurship and Multinationals Drive Globalization
Why is the firm overlooked as a contributor when we identify the drivers of globalization? Geoffrey Jones discusses his new book, Entrepreneurship and Multinationals: Global Business and the Making of the Modern World. Open for comment; 0 Comments.
- 11 Oct 2011
- Working Paper Summaries
US Healthcare Reform and the Pharmaceutical Industry
The 2010 Patient Protection and Affordable Care Act (ACA) will restructure the US health care market in the coming years. For the pharmaceutical industry, the ACA is likely to prove a mixed blessing. In this paper, Assistant Professor Arthur Daemmrich analyzes the political economy of health care, specifically concerning health care reform. He then considers how the ACA will affect the pharmaceutical sector, both quantitatively in terms of the size of the prescription drug market and qualitatively in terms of industry structure and competitive dynamics. Daemmrich also places the current reforms into historical context and describes the political negotiations that enabled passage of the ACA. Key concepts include: Since the United States is the world's largest prescription drug market and has among the fewest price control mechanisms, the ACA holds significance to pharmaceutical firms internationally. Over the course of its implementation in coming years, the ACA will significantly expand prescription drug use, including at the relative expense of other health services. In 2015, Daemmrich projects pharmaceutical spending between $435 and $440 billion (12.5 percent of total health care spending) and in 2020 it will near $700 billion (14 percent of total health care spending). Congress and the Department of Health and Human Services will be hard pressed to explain increased drug spending to consumers, especially compared to Europe and Japan where reference pricing (capping prices at an average within a therapeutic category or among peer countries) has become the norm. The ACA nevertheless holds the potential for the United States to be the first country to break out of the silo framework that dominates health budgeting in countries using reference price systems and to instead set budgets at the disease (or patient) level, linked to health outcomes. Closed for comment; 0 Comments.
- 05 Jan 2011
- Op-Ed
Funding Unpredictability Around Stem-Cell Research Inflicts Heavy Cost on Scientific Progress
Funding unpredictability in human embryonic stem-cell research inflicts a heavy cost on all scientific progress, says professor William Sahlman. Open for comment; 0 Comments.
- 01 Jun 2009
- Lessons from the Classroom
The Challenges of Investing in Science-Based Innovation
Smart science-based businesses view today's economic turmoil as an opportunity to stoke up research and innovation for long-term competitive advantage, says professor Vicki L. Sato. How about your business? Key concepts include: Companies with highly differentiated products will be able to weather this storm, and come out the other side stronger. Innovation management challenges fall across several key areas, including strategy, organizational design, decision-making, and resource allocation. Different situations will require different business decisions—investing in R&D isn't always the right path to take. Closed for comment; 0 Comments.
- 22 Apr 2009
- Working Paper Summaries
Where is the Pharmacy to the World? International Regulatory Variation and Pharmaceutical Industry Location
The era of paternalistic medicine has passed, but the notion that patients can act as consumers and make appropriate decisions concerning medical treatment poses countervailing risks of its own. A better accommodation among key players needs to be struck to foster the safe use of pharmaceuticals, according to HBS professor Arthur Daemmrich. The "pharmacy to the world," once located at the intersection of Germany, Switzerland, and France, today is found in the United States. Studies of the industry have attributed this sustained competitive advantage to a variety of factors, including U.S. intellectual property policies, funding for biomedical research through the National Institutes of Health, the absence of government controls on drug prices, and the availability of venture capital and other factors that fostered the growth of the biotechnology industry. The data and analysis presented in this working paper, however speculative, are an initial step toward deepening the understanding of interrelationships between government regulation, patients' mobilization both as regulators and as consumers, and the functioning of the pharmaceutical industry. Key concepts include: An open question is whether the current "pharmacy to the world" of the United States will lose ground to competitors from developing countries, especially India and China. Regulation plays a role in the success and failure of the pharmaceutical industry. The consumer mode that has emerged in the United States has proven easy to manipulate for the industry, as in cases of corporate-financed organizations claiming to be self-organized by patients. The consumer mode in the United States has also driven a focus on disease prevalent in wealthy countries, to the detriment of research into HIV/AIDS, malaria, and other ailments prevalent in the developing world. The combination of public attention to drug prices, health concerns from product withdrawals due to adverse reactions, and criticisms of the failure to deliver medicines to patients in developing countries pose significant challenges to the industry and regulators. The emergence of a consumer model of regulation poses a number of critical, unresolved questions about the longer-term role of government, industry, the medical profession, and citizens. Closed for comment; 0 Comments.
- 10 Sep 2008
- Research & Ideas
Long-Tail Economics? Give Me Blockbusters!
Although the Long Tail theory might argue otherwise, HBS marketing professor John Quelch believes in the power of blockbusters to excite consumers, motivate salespeople, and attract top talent. Key concepts include: In a globally integrated market, blockbuster brands that address common consumer needs are more important than ever. Blockbusters help companies excite consumers, motivate salespeople, and attract top talent. What makes a blockbuster? Size, speed, scarcity, sustainability, sizzle. Closed for comment; 0 Comments.
- 17 Jan 2008
- Working Paper Summaries
Competition in Modular Clusters
The last 20 years have witnessed the rise of disaggregated "clusters," "networks," or "ecosystems" of firms in a number of industries, including computers, telecommunications, and pharmaceuticals. In these clusters, different firms design and produce the various components of a complex artifact (such as the processor, peripherals, and software of a computer system), and different firms specialize in the various stages of a complex production process. This paper considers the pricing behavior and profitability of these so-called modular clusters. Baldwin and Woodard isolate the offsetting price effects in a model, and show how they might operate in large as well as in small clusters. Key concepts include: Clusters operating under open, public standards may have higher prices and profits than those operating under closed, proprietary standards. Cluster forms of industrial organization may not be conducive to all kinds of innovation. In particular, innovations that add new layers of functionality to the system, and thus increase total demand, will not be adequately rewarded relative to the value they create. It is important to learn how cluster configurations affect incentives to supply different forms of innovation, and how firms respond to these cross-layer dependencies in formulating their long-term strategies. Closed for comment; 0 Comments.
- 05 Jul 2006
- Working Paper Summaries
Do Managers’ Heuristics Affect R&D Performance Volatility? A Simulation Informed by the Pharmaceutical Industry
Can the R&D process be managed to provide more certainty and success? The authors explore R&D performance volatility using the pharmaceutical industry as the model. The study looks at two types of heuristics that are commonly used to manage R&D project portfolios: (1) which products to start, and whether to continue or kill a product in development; (2) how resources should be allocated at each phase of development. By changing the heuristics used to make decisions at each stage of development, managers can decrease the amount of uncertainty and failure in the R&D process. Key concepts include: Pay attention to R&D portfolio management, not just portfolio selection. Don't delay in killing bad projects. Closed for comment; 0 Comments.
- 25 Apr 2005
- Research & Ideas
New Learning at American Home Products
In Alfred D. Chandler Jr's new history of the modern chemical and pharma industries, American Home Products follows a singular path to success. An excerpt from Shaping the Industrial Century. Closed for comment; 0 Comments.
- 22 Nov 2004
- Research & Ideas
Side Effects: The Case of Propecia
Selling Propecia was a difficult marketing task for Merck & Co., and was recently the subject of a case study debated by Harvard Business School alumni. Closed for comment; 0 Comments.
- 08 Dec 2003
- Research & Ideas
Why Europe Lags in Pharmaceuticals and Biotech
Governmental, cultural and academic differences are hurting Europe’s chances of gaining on the U.S. Can anything be done? Closed for comment; 0 Comments.
- 01 Dec 2003
- Research & Ideas
Sometimes Success Begins at Failure
Projects that appear to be duds may have unintended upsides—Viagra started life and failed as a drug for hypertension. Here are tips for turning negative test results into gold. Closed for comment; 0 Comments.
A Better Business Model for Fighting Cancer
The Kraft Precision Medicine Accelerator aims to speed up the development and delivery of cancer therapies by improving the business processes that surround them. Open for comment; 0 Comments.