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