Exploratory analysis of innovation strategies in the pharmaceutical industry

Abstract

In the pharmaceutical industry, expiring patents may cause substantial revenue losses for the patent-holding firm. From the firms' perspective, losses of legally protected market exclusivity equal to painful losses of competitive advantages. Thus, pharmaceutical companies need to face different strategies after patent expiration in order to survive competition in the long-run. Using a case study methodology, our study presents first orientations for evaluation of those strategies with regard to their effects on firms' innovation. Analyzing theoretical works related to pharmaceutical industry as well as strategic management and empirical data collected by the authors, we formulate research propositions supposing that pharmaceutical companies are more innovative if they are focused on their core competencies in pharmaceutical research and development.