Global research and development positioning among US-based pharmaceutical companies

Abstract

The author explores the predominant strategic characteristics of fourteen multinational corporations eleven of which are among the twenty largest pharmaceutical firms world-wide. She shows that, while no dominant pattern emerges with respect to strategic choices, firms with a US focus appear less likely to be involved with diversification than their global dispersion counterparts, which are more likely to use a cost minimization strategy aimed at generic and OTC product development. The extent of global dispersion for R&D has not yet shown any difference in the traditional financial performance measures of liquidity, asset management, debt management and profitably, as determined by t-test statistics. However, using the performance measure of total return to shareholders, US focus firms outperformed global dispersion firms in 1988, but not in average returns for 1984-8. The US pharmaceutical industry is still US focused in its R&D activities, although much more globally dispersed in other value activities of its business.<>