The purpose of this research is to clarify the historical transformation process of the pharmaceutical industry by systematically collecting and analyzing historical reviews of Contract Research Organizations (CROs).
Historical changes in the CRO business model can be divided into three phases: Generation, Establishment, and Development. CROs initially had a relatively generic, labor-intensive business model that provided pharmaceutical companies with temporary resources. In 1990s, they learned functional knowledge and established capital-intensive business models specific to the drug development.
Since 2005 CROs growth lead to the dismantling of vertical integration in the pharmaceutical industry, although CROs are diverse in size and form. In the modern pharmaceutical industry, a small number of “core companies” which provide the final product are supported by specialized firms, like CROs, which are shaping “supportive nexus”.
This vertical disintegration in the pharmaceutical industry may seem to be the decline of the “Chandlerian” firms. Nevertheless, Chandler’s theoretical framework could be also applicable for the emergence of CROs.
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