Abstract
Industrial reorganization has progressed on a worldwide scale in the pharmaceutical industry with the recent intensified competition in new drug development. Mergers and acquisitions (M&A), business integrations and strategic alliances have occurred recently in the Japanese pharmaceutical industry, as well.
This paper analyzes the impact of these changes in firms' boundaries on appropriability of the returns from innovation and technological opportunities, which are the determinants of innovation. We took a case of the strategic alliance between Chugai Pharmaceutical Co., Ltd. and F. Hoffman-La Roche Ltd. and considered the impact of the alliance on appropriability and technological opportunities. We mainly analyzed the changes in the sales composition of drugs and the changes in development pipelines. The results suggest that the appropriability of returns from the innovation increased in Chugai Pharmaceutical after the alliance. On the other hand, technological opportunities from outside of the Roche group have been restricted in Chugai Pharmaceutical after the alliance.
