Innovate or Perish: Managing the Enduring Technology Company in the Global Market

Origins of the Industry Reveal Some Insights into the Broken Pipeline Problem

Blossoming of Synthetic Organic Chemistry Creates the Pharmaceutical Industry

The ethical drug industry as we know it today can trace many of its roots to two major fields of innovative research in chemistry and biology that emerged in the late nineteenth and early part of the twentieth century:

• Synthetic organic chemistry— a field built around a realization of the immense diversity of distinct small molecules that can be synthesized in a laboratory by exploiting the chemical flexibility of the humble carbon atom as a core building block

• Biochemistry— a field that led to the discovery of enzymes (specific class of proteins) as the key catalysts of biochemical process that underlie many biological functions, normal and abnormal

The pharmaceutical industry of the early and mid twentieth century, especially in Europe—(e.g., Bayer, CIBA, Geigy, Sandoz, Merck AG) arose partly as an offshoot of the fine chemicals industry, where emerging drug companies initially matched their innovative and proprietary skills in synthetic medicinal chemistry with rapid advances in the biological and medical sciences; advances that were largely a product of academic research. Although biology, physiology, and pharmacology were acknowledged as important contributing disciplines, this was an industry in which chemistry and chemists were definitely “king.”

Low-Hanging Fruit and Limited Competition

Facing an uncluttered product ...