This study identifies and analyzes factors which
determine productivity in the drug industry. It shares a
general concern about recent decline in industrial
productivity in the United States with Abernathy, Clark, and
Kantrow (1983), who developed a theoretical framework for
analyzing the causes of lackluster industrial performance.
According to Abernathy, et al. (1983), performance is
determined by government fiscal and monetary policy,
production capability, socioeconomic environment,(of which
regulation is a subset), and corporate management. This
study finds that the theoretical framework of Abernathy et
al (1983) can be used as a context for analyzing
productivity in the drug industry. In a recent case of drug
development, socioeconomic and managerial problems caused
costly delays in development, hampering the company's
capacity to be productive.
The study also finds that the strategy for industrial
revitalization developed by Abernathy et al. (1983) is
applicable to the drug industry. Specifically, corporate
management must integrate the development activities of
innovation, production, finance, and marketing more
efficiently. More efficient integration will help
management to consider the impact of one activity on the
others, and to identify deficiencies which can delay
development. This will help management cut development time
and increase profits, which will help revitalize the drug
industry.
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