The Determination Criteria Analysis for Companies’ R&D Strategies in the Pharmaceutical Industry

Globalization, increasing competition and constant technological advances have led to the shift in the strategic management of product development especially in such a knowledge-, capital- and technology-intensive industry as pharmaceuticals. Hence, it is vital to identify the most common strategies of product development as well as the factors affecting the companies’ strategy choice, which can contribute to the rise in efficiency and optimization of the product development process, progress of the industry as a whole and particular countries (including Russian Federation). This paper contributes to the analysis of the product development strategy choice determinants by examining the development process patterns in the pharmaceutical industry and providing an insight into the factors of strategic management decisions. It develops a multilevel decision framework composed of three levels of factors, namely the environmental, firm- and project-level. This conceptualization provides a systemic approach to the in-house R&D, alliances, outsourcing, mergers and acquisitions as well as cooperation, by integrating the factors determined on the grounds of competitiveness theories with those investigated in practical studies and establishing the classification. The paper reviews the influence of each factor on the strategy choice, provides an econometric analysis of the empirical data on new product development of five chosen pharmaceutical companies over the period from January, 2013 to April, 2016 and verifies the acquired results with the use of examples from Russian pharmaceutical industry. All in all, the analysis provided in this paper provides an opportunity to give a reasonable approximation for product development patterns in the pharmaceutical industry, which can be applied to elaboration of national programmes in the pharmaceutical industry.