The pharmaceutical industry is exposed to severe conditions: While a
typical R&D process lasts up to 13 years, only one out of 10'000
substances becomes a marketable product. At the same time, R&D
spending has arrived at a record level today; total R&D
expenditures in the pharmaceutical industry exceeded US$ 33 billion
in 2003, and the average R&D costs per new drug approval reached
close to US$ 1 billion. More and more pharmaceutical firms rely on
vast networks of contacts with various different partner firms, and
increasingly intend to include their partners to share some part of
the drug development risks. As a consequence, several novel vehicles
and contractual arrangements for risk-sharing have emerged, which
have not been subject to management research so far.
This research provides a preliminary typology of risk-sharing archetypes highlighting four different types of R&D collaborations (research alliances, in-licensing, co-development, and out-licensing). Whereas research alliances, in-licensing, and co-development are quite established collaboration approaches, out-licensing has long been considered a difficult task due to moral hazard issues and asymmetric information problems. However, some companies have recently adopted this strategy to utilize external resources for the development of internally developed substances in order to share R&D risks.
Therefore, this research is expected to derive a model for structuring risk-sharing in collaborative projects in pharmaceutical R&D particularly focusing on out-licensing agreements.
Aufenthaltsort: Columbia University, Graduate School of Business,
New York, USA
Referenten: Prof. Dr. Oliver Gassmann, Prof. Dr. Fritz Fahrni (beide ITEM-HSG)