Science and technology driving change in drug R&D : some lessons for the Japanese pharmaceutical industry

Abstract

The technology platform in the research and development of pharmaceutical drugs is changing dramatically -- from the traditional trial-and-error method to modem sophisticated methods that use Combinatorial Chemistry (CC), High Throughput Screening (HTS), and Gene Technology. Since the beginning of the 1990s, pharmaceutical companies have actively invested into such technologies. Some investment has been in-house, but many companies have acquired high-tech ventures or formed strategic alliances. Today it is necessary for every firm to make the best use of all these technologies in order to improve their R&D productivity. However, it is expensive to use all of them. Over the past five years, many leading global companies have begun to merge. There are various reasons for merging, but the most common is to enhance R&D activity and marketing by reducing redundancy and reinvesting the savings. These attitudes indicate that the critical mass of the industry will increase rapidly. Similar technological change is occurring in Japan. In addition, other changes in the Japanese pharmaceutical industry are also having a significant effect, such as the national health insurance system and the R&D regulatory environment. However, compared to the magnitude of radical change among global companies, much less has occurred in the Japanese industry. That is, fewer mergers have occurred between leading Japanese pharmaceutical companies. Instead, Japanese companies seem to be mired in a dilemma in a rapidly changing environment. To break through this situation, Japanese pharmaceutical companies must consider making some deals. I analyzed the R&D strategies of five pharmaceutical companies, to learn how they acquire genetic technology strategy, and I found some interesting points. The research found that increasing the critical mass of the industry through M&As and strategic alliances, coupled with excellent strategies and effective R&D management, is indispensable for the industry as a whole, specifically for medium-sized firms. Finally, I conclude with some specific recommendations for Welfide Corporation, as it seeks to solve the dilemmas and enter the global markets of the pharmaceutical industry.