Keywords: innovation strategy, capabilities, intellectual property rights, pharmaceutical industry
Strategic innovation management of change in the pharmaceutical industry
The pharmaceutical industry is currently preparing for a transition in many countries that gives rise to many unanswered questions regarding innovation strategy and ultimately may threaten the survival of companies in the industry. The cause of this transition is the GATT/WTO agreement that these countries signed in 1995. This agreement has broad implications for intellectual property rights, and particularly for the pharmaceutical industry. Major changes will occur in this industry, now that its intellectual property rights are being brought in line with those of the main economies in the world. The change from near-perfect competition with homogeneous and price controlled drugs to a market with patent protected products, a virtual monopoly in many sub-markets, will give rise to an extensive shift in the form of competition. This study, using the Indian pharmaceutical industry as a case study, proposes an approach to strategic innovation management, on which to build capabilities and from which to manage change, which can form a guide for companies preparing for this change.