Academic journal article Annals of Business Administrative Science

Exploring the Characteristics of Pharmaceutical Product Development: A Cross-Industry Perspective

Academic journal article Annals of Business Administrative Science

Exploring the Characteristics of Pharmaceutical Product Development: A Cross-Industry Perspective

Article excerpt


Pharmaceutical product development is considered to be unique. However, the uniqueness of drug development in comparison with other industries has never been clearly explained, either academically or practically. Numerous studies have focused on product development management in the fields of technology and innovation management from the 1960s to today.1 Previous studies adopted the approach of identifying universal success factors common to all products and industries. However, beginning in the 1990s, more emphasis began to be placed on the product development process, and a more detailed analyses resulted in the discovery that effective product development patterns differed depending on product and industry (e.g., Eisenhardt & Tabrizi, 1995; Iansiti, 1998; Kuwashima, 2003; Pisano, 1997; Tomita, 2009; Wi, 2008; Yasumoto & Shiu, 2007; Yoshimoto, 2009). However, having hundred effective development patterns for hundred products and industries is too complex; a framework is required for cross-industry analysis that more simply organizes relationships between product and industry characteristics and development patterns.

A cross-industry analysis requires a generic perspective that can be applied to product development in all types of industries. For example, clinical trials are one trait unique to drug development; however, using industry-specific ideas and vocabulary do not enable a comparative analysis across industries. Thus, this paper employs a framework based on a highly generic problem-solving model to organize the characteristics of drug development and effective management from the perspective of inter-industry comparisons.

Characteristics of Pharmaceutical Product Development from a Problem-solving Perspective

(1) What is a problem-solving model?

Problem-solving models were not originally developed as an analytical framework for technology management or innovation management. Rather, they were used in the fields of organization and statistical decision theories, and were then applied to other fields including technology management and innovation management (Barnett & Clark, 1998; Lynn, 1982; Simon, 1969; Thomke, von Hippel, & Franke, 1998; Wheelwright & Clark, 1992).2 As can be seen from the fact that organization and statistical decision theories were the sources of this approach, problem-solving models are extraordinarily generic and can be applied to all types of products and industries, making them suitable for cross-industry analyses.

In general, problem-solving models are formulated in the following five steps (Clark & Fujimoto, 1991; Gerstenfeld, 1970):

1. Definition of the problem3

2. Generation of alternatives

3. Testing of alternatives

4. Evaluation of alternatives

5. Selection of alternatives

Applying this model to pharmaceutical product development provides the following steps:

1. Determination of target therapeutic areas

2. Synthesis of and/or search for chemical compounds

3. Non-clinical and clinical trials of chemical compounds

4. Evaluation of chemical compounds

5. Selection of chemical compounds

In general, the core activities of problem solving include the generation of alternatives and testing (Simon, 1969). Thus, the following two points can be derived by focusing on these two activities and organizing the characteristics of pharmaceutical development from the perspective of a cross-industry comparison.

First is the necessity of generating an extremely high number of alternatives. In pharmaceutical development, it is very difficult to specify in advance the chemical compound structures that will achieve the goals. Accordingly, several thousand to more than ten thousand compounds must be generated or searched to find an effective compound.

Second is the necessity of highly detailed tests. Pharmaceuticals affect humans, and thus companies must carefully confirm both the efficacy and safety of compounds. …

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