Decision‐Making in the Pharmaceutical Industry: Analysis of Entrepreneurial Risk and Attitude Using Uncertain Information

Posted: 16 Sep 2011

See all articles by Ivor Cowlrick

Ivor Cowlrick

affiliation not provided to SSRN

Thomas Hedner

affiliation not provided to SSRN

Roland Wolf

affiliation not provided to SSRN

Michael Olausson

affiliation not provided to SSRN

Magnus Klofsten

University of Linkoping

Date Written: September 2011

Abstract

The main purpose of this study was to investigate judgments made by employees from the pharmaceutical industry and allied health‐care sectors in a set of four different drug discovery and development cases derived from real scenarios. Each case study related to go/no‐go decisions taken from various steps in drug discovery through preclinical and clinical development (investigational new drug) on to market introduction (new drug application) and treatment of the target population. Using a web‐based questionnaire, 52 respondents made five sets of judgment within each drug case whether to continue or halt further project development. For each case, additional details of the developmental scenario were disclosed to the respondent after completion of each judgment response. We also assessed to what extent the individual judgments given by the respondents were influenced by work experience and functional role, education, or their perceived entrepreneurial character. Our study demonstrates that health‐care employees differ substantially in their individual intuitive judgments of benefit and risk in go/no‐go decisions during the drug discovery and development process. This lack of coherence and wide variability with respect to the drug development cases selected may reflect judgment in the real world. Such judgments are usually taken from incomplete information, and individual decision‐making rules vary substantially between experts in the field. Further knowledge about this inherent human functional judgment variability may be helpful to form a better understanding of individual decision‐making in relation to inherent uncertainties. Additional research may also clarify how personal experience within drug discovery and development influences judgment and help to optimize decision outcomes in the drug development sector. Importantly, a deeper insight of the fundamentals and rules that shape individual and group decision‐making of everyday drug discovery and development may help to optimize the decision processes in the pharmaceutical industry.

Suggested Citation

Cowlrick, Ivor and Hedner, Thomas and Wolf, Roland and Olausson, Michael and Klofsten, Magnus, Decision‐Making in the Pharmaceutical Industry: Analysis of Entrepreneurial Risk and Attitude Using Uncertain Information (September 2011). Available at SSRN: https://ssrn.com/abstract=1928430 or http://dx.doi.org/10.1111/j.1467-9310.2011.00649.x

Ivor Cowlrick (Contact Author)

affiliation not provided to SSRN

No Address Available

Thomas Hedner

affiliation not provided to SSRN

No Address Available

Roland Wolf

affiliation not provided to SSRN

No Address Available

Michael Olausson

affiliation not provided to SSRN

No Address Available

Magnus Klofsten

University of Linkoping ( email )

Överstegatan 30
S-581 83 Linkoping
Sweden
+46-13-28 1785 (Phone)

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