Asymmetric R&D Alliances in the Biopharmaceutical Industry

Abstract:

In this study we propose a multistage mathematical model of coopetitive games to show how the adoption of a coopetitive framework, which considers cooperation and competition simultaneously, may advance our understanding of the study of asymmetric research and developemnt (R&D) alliances. Those alliances are aimed at exploring and/or exploiting knowledge between young and small firms and large multinational enterprises (MNEs). We selected this model, which is particularly suitable for exploring complex types of asymmetric R&D alliances that epitomize the biopharmaceutical industry, based upon the literature on asymmetric R&D cooperation and coopetition. In particular, we propose a formal coopetitive approach, where coopetition is a vector variable belonging to an n-dimensional Euclidean space. We graphically show that cooperative efforts are required and beneficial even though partners are potentially competitors in the marketplace and shape the common payoff space that they commonly create. By doing so, we highlight the requirement that coopetitive partners should balance effectively their interaction dynamics, interactions that affect both the value creation and value capture processes.

Keywords::

• R&D alliances
• coopetition
• biopharmaceutical industry

Notes

It is worth noting that the Obama administration’s Medicare Program registration costs and, in general, the global problems of emergent drug development, compel pharmaceutical firms to deploy new capabilities to reconfigure their business models and change their innovative processes. Pharma firms’ innovative processes are, therefore, mainly focused on retooling their drug pipelines and on seeking higher returns on their R&D investments.