Thesis (S.M.)--Harvard-MIT Division of Health Sciences and Technology, 2009. / Cataloged from PDF version of thesis. / Includes bibliographical references (p. 51-58). / It has become increasingly important for companies in the biopharmaceutical industry to maximize the clinical, commercial and economic impact of their products on a global scale. In this context, both Western and Asian firms have been engaging in international merger and acquisition (M&A) activities to improve global capabilities and competiveness. The M&A activities in the sector are driven by near-term expiration of blockbuster drug patents and marketplace pricing constraints, resulting in a perceived need to attain improved economies of scale. Across the industry, one can see an increased emphasis on biotechnology medicines (or biologics). Recent large business deals that have seen Pfizer acquire Wyeth, Merck acquire Schering-Plough and Roche complete the acquisition of Genentech all have some element of positioning around the exploitation of biologics for future growth. These trends are thought to put pressure on medium-/small-sized R&D firms to come up with competitive strategies in the global biologics market. Furthermore, the biologics market faces the threat of biosimilars (biogenerics or follow-on biologics). With the advent of expected changes in the US government healthcare policy, a number of companies will be facing competition from biosimilars in the near term. Mitigating the impact of the threat of biosimilars, to some extent, is the fact that manufacturing of most non-vaccine biologics is challenging because of the structural and biological complexity of the commercial product as well as the significant differences in the manufacturing process from one product to the next. Technical capacity and the ability to respond to shifting demands are likely to be one of the critical determinants for the success of individual companies in the biologics (and biosimilars) market. To meet the perceived needs, companies have either expanded their manufacturing capacity and capabilities by building inhouse facilities or by striking long-term supply deals through contract manufacturing organizations (CMOs). Utilizing highly efficient and cost-effective overseas biologics, CMOs could be a value-added business model for Western participants. The most dramatic cost-saving strategy would likely result from outsourcing operations to firms in emerging Asian countries like India and China. However, intellectual property protection and quality control issues have been considered problematic in these countries. In this context, other relatively well developed Asian countries-Japan, South Korea (referred to as Korea) and Singapore, which have relatively strong intellectual property protection and sophisticated manufacturing environments, might be strategic partners for Western firms in the contract biomanufacturing markets. In this research study, the current biopharmaceutical industry trends and global strategies of companies in Japan, Korea and Singapore were explored. As a sub-segment of the biopharmaceutical industry, the geographical features and defining characteristics of the biologics CMO market were examined. The framework for analysis was based on an assessment of the key contributing factors: capacity, capital and cost. The potential capabilities among emerging Asian participants in the global biologics CMO markets were assessed through personal interviews with senior/executive corporate managers of Asian domestic biopharmaceutical companies (principally Japanese and Korean firms). As the results indicate, the biopharmaceutical industry of each country has been influenced both by corporate strategy and government policy. The quantitative analyses show that the current biologics CMO market in these countries is underdeveloped with a few existing participants focusing on high-tech biomanufacturing of commercial products. In addition, the macro-and micro-environment of the biotechnology industry in these countries appears to be unfavorable for the development of a global biologics CMO market. Through individual interviews, it was found that biopharmaceutical corporate managers believe that the opportunities for growth/development of an Asian emerging CMO at the global level are modest, expressing the view that their direct presence in the biologics markets as global-scale CMO participants was unlikely to take place because of financial concerns (high risk investment and profit margin sharing), absence of a global network (no proven track record) and existence of an R&D-intensive corporate culture. In conclusion, while the capabilities of large and established domestic biopharmaceutical firms in these Asian countries certainly can meet regulatory, legal and technical requirements as emerging global CMO participants, the possibilities for development of a global CMO capability in these countries are likely to be small. Strategic considerations for the possible/likely development paths of the CMO market in these Asian countries are provided. / by Soo Jin Chun. / S.M.
| Identifer | oai:union.ndltd.org:MIT/oai:dspace.mit.edu:1721.1/63014 |
| Date | January 2009 |
| Creators | Chun, Soo Jin, S.M. Massachusetts Institute of Technology |
| Contributors | Ernst Berndt and Brian Seed., Harvard University--MIT Division of Health Sciences and Technology., Harvard University--MIT Division of Health Sciences and Technology. |
| Publisher | Massachusetts Institute of Technology |
| Source Sets | M.I.T. Theses and Dissertation |
| Language | English |
| Detected Language | English |
| Type | Thesis |
| Format | 59 p., application/pdf |
| Rights | M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission., http://dspace.mit.edu/handle/1721.1/7582 |
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