Learning from giants: Early exposure to advance markets in the growth and internationalisation of Spanish health care corporations in the twentieth century

Abstract

This article examines the influence of early exposure to advanced markets of the United States and Germany in the growth and internationalization of health care firms from Spain, a late industrialised country. Based on the case studies of the Spanish corporations Grifols and Ferrer, the study shows that early exposure to advanced markets helped them grow in their national markets, and in the world health care industry. It shows further that the specific capabilities developed by both firms were determined by path-dependent networks with scientists and institutions, on the one hand; and strategic alliances, acquisitions and mergers with German and US corporations on the other.

Keywords:

• Multinationals
• Spain
• Biotechnology
• Pharmaceutic Industry

Notes

1. CGCOM, Informe sobre el sector farmacéutico; OECD, Statistics 2016.

2. Prados de la Escosura, “World Human Development.”

3. Galambos and Sewell, Networks of Innovation, pp; Galambos and Sturchio, “Pharmaceutical Firms”; Vagelos and Galambos, Medicine, Science, and Merck; and Chandler, Shaping the Industrial Century.

4. Chandler, Shaping the Industrial Century, 9.

5. Data from public health care corporations listed in Nasdaq, one of the leading world markets for these industries, show that at the end of 2016 the largest major pharmaceutical corporation in the US (Johnson and Johnson) has a market capitalisation which is six times the capitalisation of the next follower (Abbott Laboratories) in this subsector of the health care industries, see https://www.nasdaq.com/screening/companies-by-industry.aspx?industry=Health%20Care&marketcap=Mega-cap#ixzz4TN36thM5Na

6. Guillén and García-Canal, “American Model of the Multinational.”

7. Chandler, Shaping the Industrial Century, 9.

8. Fernández Pérez and Colli, Endurance of Family Business; Guillén and García-Canal, Emerging Markets Rule; Fernández Pérez and Lluch, Evolution of Family Businesses.

9. Campins and Pfeiffer, “La importancia de las redes sociales” for the Argentinian pharmaceutical industry, and Fernández Pérez, “Laboratorios Andrómaco” for a case study of the US subsidiary of the Spanish pharmaceutical multinational Andrómaco between 1928 and 1946.

10. Chandler, Shaping the Industrial Century, 9.

11. Guillen and García-Canal, “La expansion internacional,” 23–34. For the purposes of this research, the original database has been updated to 2014, following the same methodology of search and codification.

12. We consider advanced countries those hosting the headquarters of world leading firms in the industry, namely US, UK, France, Germany, Switzerland and Japan.

13. Guillén and García-Canal, “American Model of the Multinational.”

14. Sjögren, “Family Capitalism”; Puig, “The Global Accommodation”; Puig, “Networks of Opportunity”; Chauveau, “Quelle historie de l’hôpital”; Colli, “Patterns of Innovation”; Zamagni, “The Rise and Fall”; and Donzé, “Siemens and the Construction.”

15. Pons and Vilar, Seguro de salud privado y público; Chaqués, “Políticas públicas y democracia en España.”

16. Pons and Vilar, Seguro de salud privado y público; Chaqués, “Políticas públicas y democracia en España.”

17. Puig and López, “Chemists, Engineers and Entrepreneurs,” 345–59; Fernández Pérez, “Laboratorios Andrómaco,” 266–75.

18. Estadística del comercio exterior de España. Madrid, Dirección General de Aduanas/Ministerio de Hacienda 1905‒1980, and Ministerio de Economía y Competitividad for 2005.

19. Puig, Constructores de la química Española; Cilingiroglu, Transfer of Technology.

20. Grifols i Lucas, Vivències d’un empresari de postguerra; Grifols, When a Dream Comes True, pp.

21. Pérez Moreda, Reher, and Sanz, La Conquista de la Salud.

22. Rodríguez and Martínez, Salud Pública en España.

23. Catalán, “El círculo virtuoso”; and Fernández Pérez, “Laboratorios Andrómaco.”

24. Historical Archive Museu Grifols in Barcelona. Library Catalog and Journals Catalog. Also Grifols i Lucas, Amb un suro; Grifols, When a Dream Comes True.

25. Cabana, Carles Ferrer Salat.

26. Historical Archive Museu Grifols in Barcelona. Actas Laboratorio Grifols 1940–1964 (Ref. 6864); and notarial documents of constitution and changes in the family firm (Escrituras de constitución y ampliación de capital).

27. Historical Archive Museu Grifols in Barcelona. “Memoria sobre el viaje a Inglaterra realizado por Victor Grifols del 12 de julio al 22 de Agosto de 1946.” Ref. 05898. Grifols Lucas had an interview with an executive of the British subsidiary of the US firm Hayden looking for an agreement on technical cooperation and investment with them. Hayden replied that they would be positive provided Grifols guaranteed the joint firm would have exclusive rights of manufacturing of penicillin in Spain, strong protection against imports, and a joint investment of 10 million pesetas. He also met representatives of Burroughs Welcome and Co. and Ashe Laboratories Ltd for nutritional products. Grifols arranged with a Catalan contact in London named Pedro Gilabert to have an agent providing commercial and information services to Grifols. In 1948 the Spanish government regulated the monopoly of the production of penicillin in Spain, that would benefit two large business groups, and would mean a de facto exclusion of small entrepreneurs like Grifols that were working hard to contact leading penicillin producers to try to break in to the business of penicillin. This legal exclusion was the first one in the history of Grifols that made the company take the decision to diversify in order to survive. The other important legal landmark in this regard would come in 1965 with the legal prohibition on exporting blood in Spain, which de facto benefited once again a few large plasma manufacturers like Hubber that were integrating the business and needed to control Spanish raw materials for their new large firms, again damaging the interests of small labs like Grifols, which had been exporting blood to Scandinavian countries, Germany, Switzerland and the US, among others, in the first years of the 1960s. This prohibition, again, made Grifols diversify, going into the expanding business of the distribution of hospital equipment, for which they entered into an alliance and partnership with the leading US company, American Hospital Supply Corporation.

28. ‘Spain had a poor reputation in the world and it was almost impossible to sell anything abroad … we began to sell plasma to a German lab, but under its own brand’ (Grifols i Lucas, Amb un suro, 110).

29. Interview with Alfonso Vidal Ribas Cadira, Roca Vinyal’s nephew by the phone with Paloma Fernández, January 26, 2015. Roca Vinyals had no sons when he died in 1960, only nephews, and the widow María Dolores Cadira continued his businesses after he died.

30. Historical Archive Museu Grifols in Barcelona. Correspondence Hemobanco and Dade Reagents Inc., Ref. 2331 to 2374, 1958‒1969.

31. Historical Archive Museu Grifols in Barcelona. Private correspondence and Notarial Records 1957–1966.

32. Historical Archive Museu Grifols in Barcelona. Agreement with American Hospital Supply Corporation; and Grifols 2011:113. On Antonio Ruiz and these three women, and Interview with Montserrat Vinyals Vallesta (Ruiz’s wife) by Rosa Avella from the Grifols Archive on 4 May 1999 (transcript in the Grifols archive).

33. Historical Archive Museu Grifols Ref. 06316.

34. Historical Archive Museu Grifols in Barcelona. Interview with Guillermo Anido by Rosa Avella in 1999, transcript; Interview with Victor Grifols Roura by Paloma Fernández, February 13, 2015; and Shareholders Agreements and Notarial Constitution of Companies in Grifols Archive years 1960 to 1985.

35. Historical Archive Museu Grifols in Barcelona. Ref. 06316.

36. Historical Archive Grifols in Sant Cugat del Vallés. Ref 05878c and 05878b.

37. Historical Archive Museu Grifols in Barcelona. Ref. 2176 Actas Laboratorio Grifols Caja 92, June 15, 1965, Junta General ordinaria de accionistas, and Juntas for June 15, 1966, June 20, 1967, June 7, 1968, June 18, 1973, June 5, 1974.

38. Historical Archive Museu Grifols. Ref 2176. Actas Laboratorio Grifols 1965–1987.

39. Historical Archive Museu Grifols in Barcelona. Ref 05626 and Conference in Miami (1994) and Boletín Informativo Grupo Grifols May 1980 in Ref 05659.

40. Victor Grifols Roura, interviewed February 13, 2015.

41. Cercle d’Economia, Cercle d’Economia 1958–1983; Maluquer de Motes, El Largo Camino a Europa.

42. See note 5 above; and Ferrer Salat, Europa y España.

43. Ferrer Salat, “Hacia una Política Industrial.”

44. Foguet, Solemne discurso de investidura.

45. Bank of Spain, Historical Archive, Deed of Conversion, 1975.

46. Historical Archive Museu Grifols in Barcelona Reference 05626; and Conference in Miami (1994) and Boletín Informativo Grupo Grifols May 1980 in Historical Archive Museu Grifols in Barcelona Reference 05659.

47. Ibid., 128–9.

48. Ibid., 138–9.

49. Foguet, Investigación concertada.

50. Ibid., 134–5.

51. Accessed July 2016. https://www.jaortiz.info/index.html

52. Historical Archive of the Bank of Spain, IEME Files, Deed of Conversion, 1975.

53. See note 39 above, 135.

54. Accessed July 2016. https://www.ferrer.com

55. Acquisitions of Grifols in the US: https://www.grifols.com/portal/es/grifols/origens; https://www.belinked.es/exito(March2015);https://openaccess.uoc.edu/webapps/o2/bitstream/10609/13101/1/GRIFOLS%20Factores%20Competitividad%20a%20Largo%20Plazo.pdf (March 2015); https://www.elexportador.com/062003/digital/empresas_huellas.asp (about the Probitas operation, March 2015). Also Rich, “‘La historia de…”

56. Grifols, Historical Archive Grifols in Barcelona. Revista Cosmos; http://www.grifols.com.

57. Grifols, http://www.grifols.com and La Vanguardia, Saturday July 9, 2016.

58. Accessed September 2015. http://www.Ferrer.com

59. Accessed May 2016. http://www.histocell.com

60. Accessed May 2016. http://www.spheriumbiomed.com

61. Fernández Pérez, “Acerinox.”