Prof. Matthew Higgins (Georgia Tech)
Program
- Date: 10.09.2008
Time: 17:15 - 18:45
Location: Room 202, Kaulbachstr. 45
Strategically Timing New Drug Introductions: Regulatory Constraints and the Role of Complementary Assets
We demonstrate the role regulatory constraints have on competition in the pharmaceutical industry. We develop theory and evidence on the strategic response of incumbent pharmaceutical firms to a change in their competitive environment—the increasing use by generic entrants of regulatory provisions in the Hatch-Waxman Act. Noting that generic firms are using the Paragraph IV certification to challenge branded products in the period between the loss of exclusivity and patent expiration, we theorize that a compression is occurring in incumbent firm payback periods, thus causing significant revenue losses in the pharmaceutical industry. By analyze pharmaceutical firms’ responses to these challenges, our findings suggest that some firms have been able to strategically time the introduction of new products in order to protect revenue streams. Using a novel set of product level data we explore the determinants of firm performance at new product timing, including the importance that downstream complementary assets, internal research capabilities and patent strategy play in mounting a well-timed response. Because our data also allows us to determine the types of new products that are being strategically introduced, we find a higher dependence on reformulations and next-generation products both of which require underlying novel products, thus further emphasizing the importance of novel drug development.
- Date: 16.09.2008
Time: 16:15 - 17:45
Location: Room 202, Kaulbachstr. 45
A Multi-Dimensional View of Alliance Complexity and Value Division in Technology Sourcing Agreements
Most research on alliances ignores the structures of the underlying relationships as codified by contract. By overlooking these structures the complexity of the fundamental relationship is ignored. This is problematic since it is how these relationships are codified and how control rights are allocated that dictate how firms will benefit (or not) from an alliance. We present a novel method to analyze the determinants of alliance complexity in a multi- dimensional framework. We then look at the effect these same determinants have on the allocation of control rights between firms. From a transaction cost perspective we can begin to look at the cost/benefit of entering more (or less) complex agreements in terms of the allocation of rights (i.e., value appropriation). This approach provides a new framework in which to begin to think about the net effect alliance portfolios have on a firm.