Jeremy Howells

Going global: The use of ICT networks in research and development

Abstract Although the process of the internationalisation of Research and Development (R&D) has been partial and fragmentary, many multinational companies are now faced with coordinating and managing a range of R&D laboratories and technical and design centres spread across the world. The use of information and communication technologies (ICTs) has been seen by R&D managers as one means of helping to deal with the problems and issues that have arisen with this expansion of international research networks. However, although communication within the R&D function has been seen as crucial in research and innovation performance, most of the stress in the use of ICT in research until recently has been in improving productivity. The paper explores some of the new ways that companies are using computer-mediated communication systems as a way to improve communication and information flows between dispersed sites and in the new types of work organisation that are emerging. The paper concludes by looking at some of the benefits and problems associated with implementing these new structures and forms of working in R&D.

Diffusion and management of electronic data interchange: barriers and qpportunities in the uk pharmaceutical and healthciare industries

This paper is based on evidence from a survey, conducted during 1992, investigating the adoption of electronic data interchange (EDI) amog neraly 20 furms in the pharmaceutical and healthcare sector within the UK. In particular, it focuses on the factors behind the adoption and diffusion of EDI, and the barriers to its uptake and spread. It also analyzes some of the strategic, organizational and managerial issues behind its implementatio and development. The survey highlights the relatively slow rate of adoption of EDI within this sector and key problems that inhibit its uptake. These include issues of costs, standards and the increasingly fragmented nature of purchasing and logistics that results from reorganization within the UK healthcare system.

Science and Technology Policy in Japan: The Pharmaceutical Industry and New Technology

Since the late nineteenth century Japan has operated government co-ordination of an industrial policy — ‘any policy targeted at improving industrial performance’ — and even a technology policy — ‘a set of policies involving government intervention with the intent of affecting the process of technological innovation’.1 Japan is no longer unusual in this respect, as many other states have either consciously put together bundles of policies with the intention of improving industrial performance or technological innovation, or else are custodians of systems where there are a number of separate policies whose combined effect amounts to much the same thing. Nevertheless it is Japan which is considered (or feared) to be most effective in creating plans for industrial and economic growth. However, it is becoming clear that there is even in Japan no single recipe for success and each industrial sector presents peculiar difficulties. Perhaps no industry is more peculiar or more reliant on government policy than the pharmaceutical industry. The prices of most of the drugs prescribed are fixed by the Ministry of Health and Welfare (MHW), it is the MHW which polices the industry to ensure that the strict regulations governing safety, efficacy and marketing are adhered to, and through its broader welfare policies it exercises strong influence over the entire medical environment.

Biotechnology Policies and Innovation Support Infrastructure in the Context of Pharmaceuticals

The use of biological processes by man dates back thousands of years to the discovery of brewing, baking and cheesemaking. It was only in the last century that significant advances were made in the understanding of these and similar biological processes. The industrial applications of some of these developments were realised at the turn of the century, with the fermentative production of commodity chemicals, such as butanol and acetone, and the establishment of industries producing such substances as antibiotics, amino acids and enzymes in the postwar period. However, it is only since 1953, when the structure of DNA was discovered, and more especially since the early 1970s with the development of powerful new techniques – notably, recombinant DNA technology (genetic engineering) and hybridoma technology (leading to the production of monoclonal antibodies) – that biotechnology has attracted public interest and that its commercial potential has been fully appreciated. There is now little disagreement that biotechnology is one of the two or three most significant technologies in terms of commercial promise in the period up to the end of the century.

The Social and Political Context of the Pharmaceutical Industry in the UK and Japan

The market for pharmaceuticals is created through the interaction of the industry with the health care providers and government agencies. It is a product of the social and political forces within a society and will continue to develop in response to changing social demands and political controls. Our aim in this chapter is to take up two of our main themes in describing the characteristic sectoral features and the governance structures which operate in this sector. The next chapter will concentrate on the economic dimension of the industry’s development but here we will describe the social organisations and the political boundaries within which the pharmaceutical industry operates. Medicines are used mainly either within health institutions or on the instruction of health professionals, usually doctors. The market served by the pharmaceutical industry is thus the creation of the health care policy of any nation state. Our first concern therefore will be to describe the formation of the health care systems and how drugs are sold and distributed within those systems. Having described the key features of the market our discussion moves on to consider the governance structures operating here. We begin with an outline of the role played by the main government agencies, notably the Ministry of Health and Welfare (MHW) and the Department of Health (DoH). However, in later chapters we shall assess how government makes use of the industrial associations created by the industry itself in the formation and implementation of policy. By way of background to this we will outline how the industry in each country seeks to govern itself and the general terms of its interaction with government. Regulation of the industry is instituted by the ministries but, in theory at least, they are subject to the control of the elected party politicians who are responsible to the electorate. In the final section we shall be asking how the actors described thus far relate to party politics.

The Economic and Technological Framework of Pharmaceuticals

The key economic and technological features of the pharmaceutical sector have been powerful factors shaping the governance and institutional system of the industry and indeed the strategies of individual firms within the industry. Outlining these key features will help to explain the way the industry has sought to shape and respond to governmental, institutional and technological pressures over the postwar period. The key elements of the economics and industrial framework of the sector will therefore he described in detail before the chapter concludes with an outline of the implications of the review for the analytical perspective set out in the rest of the book. We start, however, with a brief introduction and historical background to the industry in both countries.

Promotion, Prices and Profits

An unusual degree of control is exercised by governments on the pricing and profitability of the pharmaceutical industry in the two countries under consideration. In Japan drug prices are controlled; in the UK government stipulates permitted profit margins on domestic sales. There is no other industrial sector where the two governments play such a central role in this key area of industrial control and management. Both states are able to exercise a direct influence on the profitability of the industry as a whole and for this reason the conflict between the ministries’ dual role as industry promoters and custodians of the health service is most obvious. This chapter describes how the two ways of controlling prices have developed. Both have their origins in the 1950s and have evolved through the 1960s and 1970s alongside the growth of their respective health care systems. The 1980s, however, were a period of crisis in which the government-industry relationship came under great strain as government tried to curtail the rising cost of health care provision through policies designed to reduce the consumption and cost of medicine. In the 1990s the problems remain unresolved. Although an accommodation between the ministries and the drug manufacturers is in the process of emerging, government continues to seek further limitation on the cost of medicine in the health care system.

Science and Technology Policy in the UK and Japan

Although governments may now be less able to manipulate patent policy so that it works in favour of domestic industries, national governments still have a range of other policy instruments at their disposal with which to foster and promote science and technology (S&T) within the systems they control. In earlier chapters we have emphasised the crucial importance of research and development for the pharmaceutical industry. The total spent by the drug industry in each country is large but this is only one part of the picture and government funding for biomedical research can also be substantial. In the USA, for example, government allocated

THE COMPUTER SERVICES INDUSTRY: RESTRUCTURING FOR A SINGLE MARKET

7.7 billion for such research in 1988, substantially more than the total of US private sector-funded pharmaceutical R&D. In fact Japan and the UK are two of only four developed market economies where company financed spending on biomedical R&D exceeds that funded by government.1 Nevertheless publicly funded research plays an important role in underwriting the scientific developments in both countries and is particularly significant for the pharmaceutical industry.