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