DOMINANT BUSINESS MODELS IN THE GLOBAL PHARMACEUTICAL INDUSTRY

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  Roman Simonov

Abstract

The research is dedicated to the analyses of existing business models in pharmaceutical industry, their strength and weaknesses. The first generation of corporate business models in the global pharmaceutical sector are the traditional closed business models based on vertical integration within one company of all units of research, commercialization and market launch of blockbuster medicines. Specialization of companies within the Pharma 1.0 paradigm, characterized by the comprehensive development of pharmaceutical R&D and biotechnology at the expense of both its own sources and support of venture funding. Despite the significant competitive advantages of closed business models of pharmaceutical companies in the monopolization of entire areas of scientific and technological and innovative progress, in terms of techno globalism, they reach their limits. This is manifested in a significant decrease in the productivity of corporate research and development, the inability of firms to perform productive scientific research in all innovative areas, their inability to generate sufficient to compensate for lost revenue from the expiration of patents, the number of innovative developments, as well as a significant increase in the duration of the second and third-party development. This is the reason for the radical reorganization of traditional business models by pharmaceutical industry leaders and the implementation of qualitatively new types of models based on the implementation of open business models in the Pharma 2.0 paradigm. It involves the presence of a large number of independent pharmaceutical and biotechnology firms which, in partnership with various large and medium-sized companies, diversify their product portfolio and operating systems for managing operational processes.

How to Cite

Simonov, R. (2019). DOMINANT BUSINESS MODELS IN THE GLOBAL PHARMACEUTICAL INDUSTRY. Economics & Education, 4(2), 39-44. Retrieved from http://www.baltijapublishing.lv/index.php/econedu/article/view/1031
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Keywords

pharmaceutical sector, business model, biotechnology, innovation

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