9. Paradigm Change in the History of the Pharmaceutical Industry

The history of the pharmaceutical industry is told within three major paradigms, each of which arises through a continuous interaction between science, technology, business organizations, national institutions, and the wider growth of economic and social developments. The first paradigm begins in the mid-19th century, when the influence of chemistry on medicinal research had reached a degree of maturity, and ends with the outbreak of WWII. The second paradigm requires a better understanding of organizational features that differ from the old-line pharmaceutical companies that emerged in the 19th century. These companies were largely influenced by new institutions, restrictive environments, and turbulent decades. The third paradigm reflects geographic shifts of specialization in pharmaceuticals and changes in the composition of organizations involved; its setting is more collaborative and networked than previous paradigms. The shift between paradigms in this industry is therefore associated with the character of international business efforts and the context for which these efforts occur, with implication for firm responses to new developments in science and technology, and theories in international business, strategy, innovation, and economic geography.