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- Title
The Effect of Longer Development Times on Product Pipeline Management Performance.
- Authors
Travassos, Xisto L.; Loiola, Elisabeth; Figueiredo, Paulo S.
- Abstract
In the pharmaceutical industry, value is being destroyed through longer product development times. Given that patent lives are (normally) fixed at 20 years, the double hit of increasing time to market is evident -- higher R&D costs and less time at market before generic competitors are able to be released into the marketplace. The Policy implications are massive: A huge and permanent shift away from internal R&D towards partnerships, licensing deals and acquisitions of more innovative biotechnology companies. In this study, we build a system dynamics model of the product development pipeline for a single company operating in the pharmaceutical market. The study shows that in the presence of loss of value due to longer lead times, it is more advantageous to: (a) work faster to reduce the backlog of projects; (b) increase the number of projects started whenever it is possible reduce complexity in the pipeline; and also (c) the optimal decision on resource allocation is independent of the loss of value due to longer lead times.
- Subjects
DRUG development; LEAD time (Project management); NEW product development management; PHARMACEUTICAL industry management; DYNAMIC models; RESEARCH &; development; MANAGEMENT; ECONOMICS
- Publication
RAC: Revista de Administração Contemporânea, 2015, Vol 19, Issue 4, p461
- ISSN
1415-6555
- Publication type
Article
- DOI
10.1590/1982-7849rac20151430