2017/10 | LEM Working Paper Series | ||||||||||||||||
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The increasing role of contract research organizations in the evolution of the biopharmaceutical industry |
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Margherita Balconi and Valeria Lorenzi |
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Keywords | |||||||||||||||||
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Evolution of industries, R&D outsourcing, tacit knowledge, biopharma industry
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JEL Classifications | |||||||||||||||||
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D83, L10, L22, O30
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Abstract | |||||||||||||||||
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The role played in the last decades by contract research organizations
(CROs) has been almost completely neglected by the economic and
managerial literature. At most they are presented as firms performing
routine clinical tasks, a portrait which is largely outdated and
misleading. Thus the main objective of this paper is to highlight the
evolution of the CRO segment of the biopharma industry, discuss the
foundations of CROs' comparative advantage and underline the
consequences of their growth for the effective functioning of the
industry. We suggest that the increased role acquired by CROs in
performing fundamental phases of R&D has made the anatomy of the
biopharma system more functional. In fact even if the turbulence and
mortality of IP-based biotech firms is extremely high, if they rely to
a great extent on CROs, the experience acquired to carry out their
projects - which mostly fail - does not get lost but cumulatively
enhances CROs' capabilities, a resource that can be tapped to carry
out further projects.
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