Document Type

Closed Project

Publication Date

Spring 2017


Charles Weber

Course Title

Management of Technological Innovation

Course Number

ETM 549/649


The multinational biopharmaceutical industry grapples with intense financial pressures due to an increasingly cost-constrained and highly regulated health care environment, finite patent expiries on blockbuster drugs, generic competition, decreases in effective market exclusivity from new innovations, and a proliferation of smaller markets due to the escalating molecular segmentation patients populations (i.e., personalized medicine). Specifically, due to dramatic cost reductions in DNA sequencing following the development of “next-generation” sequence platforms in 2008, molecular diagnostics are increasingly being considered to be cost effective enough to be used as a standard medical test, both prospectively for risk assessment and confirmation of diseases---and increasingly, therapeutics. Although the progress in genomics is heralded as a solution to overcome certain rare diseases, some of the ethics and privacy questions to genomic research, such as how whole-person genomic information is collected and stored, and what constitutes informed consent are being vigorously debated. In the midst of these developments, pharmaceutical companies are obliged to reevaluate their drug development strategies and select among alternative future business models in order to stay relevant. Using a dynamic capabilities lens, this paper studied the impact of genomics generally and gene therapy specifically on the rare disease sector of the biopharmaceutical industry. This study found that increasing rates of cumulative returns depends on accumulating knowledgebased employees and expanding product portfolios of disruptive genomics-based technologies for treating rare diseases. Further, thisstudy highlights the importance of building the capability and capacity to absorb expertise and accumulate knowledge for new product innovations and sustainable competitive advantage.



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