Book contents
- Frontmatter
- Contents
- List of Figures
- List of Contributors
- Abbreviations
- 1 The business of healthcare innovation in the Wharton School curriculum
- 2 The pharmaceutical sector
- 3 Pharmaceutical strategy and the evolving role of merger and acquisition
- 4 The biotechnology sector
- 5 Biotechnology business and revenue models
- 6 The medical device sector
- 7 The healthcare information technology sector
- 8 Healthcare innovation across sectors
- Index
- References
3 - Pharmaceutical strategy and the evolving role of merger and acquisition
Published online by Cambridge University Press: 05 November 2012
- Frontmatter
- Contents
- List of Figures
- List of Contributors
- Abbreviations
- 1 The business of healthcare innovation in the Wharton School curriculum
- 2 The pharmaceutical sector
- 3 Pharmaceutical strategy and the evolving role of merger and acquisition
- 4 The biotechnology sector
- 5 Biotechnology business and revenue models
- 6 The medical device sector
- 7 The healthcare information technology sector
- 8 Healthcare innovation across sectors
- Index
- References
Summary
It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.
Introduction
The sections in this chapter deal with a common set of topics: horizontal consolidation, merger and acquisition (M&A), advantages of size, economies of scale and scope, diversification, and industry concentration. These topics all interrelate around the fundamental issue in industrial organization: how best to organize firms and markets in order to achieve optimal economic performance?
Consolidation has been rampant in most sectors of the healthcare industry since the 1980s and 1990s. Indeed, the industry was the second most active in terms of M&A activity (behind finance) between 2008 and 2009. In the pharmaceutical sector, the prior decades had been a time of growth and consolidation, as companies leveraged both size and scale in bringing drugs to market. The current landscape, however, is one of new challenges requiring new approaches to their solution. Companies are faced with internal pressures of declining pipeline productivity and compressed timelines, external pressures of patent expiry and pricing, and the uncertain implications of healthcare reform. Accompanying this evolution of challenges has been an evolution in the strategic approaches taken by pharmaceutical companies to best position themselves for success in the upcoming years.
- Type
- Chapter
- Information
- The Business of Healthcare Innovation , pp. 116 - 193Publisher: Cambridge University PressPrint publication year: 2012
References
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