| Many of the strongest European pharmaceutical firms | | | | position in Biogen, a practice that became increasingly |
| adopted this strategy, seeking to develop their own | | | | popular in pharmaceuticals. The situation with Biogen |
| capabilities across a relatively narrow front while | | | | and Schering-Plough illustrates the finding of study |
| working with biotech startups. The small, | | | | conducted by Lerner and Merger (1998), which |
| university-linked biotechs were at first almost entirely | | | | identified 25 critical control rights in biotechnology |
| an American phenomenon, and this gave the large | | | | innovation alliances, in particular those regarding |
| U.S. pharmaceutical companies an initial advantage, as | | | | alliance management (manufacturing, clinical trials), the |
| did the federal government's support for basic | | | | control of intellectual property, determination of |
| research in molecular genetics. But soon, European | | | | alliance scope, equity in R&D companies, seats in |
| governments were attempting to close the widening | | | | companies’ boards. |
| biotech gap, hoping that government support would | | | | From standpoint of human resource management, |
| make up for the venture capital that was not | | | | innovation in pharmaceutical industry in the light of all |
| available to their potential innovators. | | | | accompanied trends inevitably leads to outsourcing of |
| One of the interesting international hybrids was | | | | labor (not associated with acquisitions or mergers). |
| Biogen, a startup that was built on American science | | | | During 1999-2004, pharmaceutical firms increased the |
| and that quickly expanded through licensing | | | | extent to which they outsourced R&D significantly. |
| arrangements with several leading pharmaceutical | | | | Developing economies of India, China and Singapore |
| firms. Biogen soon had operations in Germany, | | | | now play active roles in the industry, creating not |
| Switzerland, and Belgium. Schering-Plough, an | | | | only lower-cost sources of assistance but also |
| American pharmaceutical company, collaborated with | | | | potential future rivals for the large pharmaceutical |
| Biogen in the race to capture the anticipated global | | | | companies. From the strategic point of view, any |
| markets for interferon. To enhance and protect its | | | | company’s planning effort must answer the |
| access to Biogen's products and processes, | | | | question of how this trend toward outsourcing will |
| Schering-Plough in the end bought a substantial equity | | | | impact the industry in future. |