| Many of the strongest European pharmaceutical | | | | a substantial equity position in Biogen, a |
| firms adopted this strategy, seeking to | | | | practice that became increasingly popular in |
| develop their own capabilities across a | | | | pharmaceuticals. The situation with Biogen |
| relatively narrow front while working with | | | | and Schering-Plough illustrates the finding |
| biotech startups. The small, | | | | of study conducted by Lerner and Merger |
| university-linked biotechs were at first | | | | (1998), which identified 25 critical control |
| almost entirely an American phenomenon, and | | | | rights in biotechnology innovation alliances, |
| this gave the large U.S. pharmaceutical | | | | in particular those regarding alliance |
| companies an initial advantage, as did the | | | | management (manufacturing, clinical trials), |
| federal government's support for basic | | | | the control of intellectual property, |
| research in molecular genetics. But soon, | | | | determination of alliance scope, equity in |
| European governments were attempting to close | | | | R&D companies, seats in companies' boards. |
| the widening biotech gap, hoping that | | | | |
| government support would make up for the | | | | From standpoint of human resource management, |
| venture capital that was not available to | | | | innovation in pharmaceutical industry in the |
| their potential innovators. | | | | light of all accompanied trends inevitably |
| | | | leads to outsourcing of labor (not associated |
| One of the interesting international hybrids | | | | with acquisitions or mergers). During |
| was Biogen, a startup that was built on | | | | 1999-2004, pharmaceutical firms increased the |
| American science and that quickly expanded | | | | extent to which they outsourced R&D |
| through licensing arrangements with several | | | | significantly. Developing economies of India, |
| leading pharmaceutical firms. Biogen soon had | | | | China and Singapore now play active roles in |
| operations in Germany, Switzerland, and | | | | the industry, creating not only lower-cost |
| Belgium. Schering-Plough, an American | | | | sources of assistance but also potential |
| pharmaceutical company, collaborated with | | | | future rivals for the large pharmaceutical |
| Biogen in the race to capture the anticipated | | | | companies. From the strategic point of view, |
| global markets for interferon. To enhance and | | | | any company's planning effort must answer the |
| protect its access to Biogen's products and | | | | question of how this trend toward outsourcing |
| processes, Schering-Plough in the end bought | | | | will impact the industry in future. |