Business Model Innovation in the Pharmaceutical Industry: The Supporting Role of Organizational Design

32 Pages Posted: 25 Feb 2014

See all articles by Nicolai J. Foss

Nicolai J. Foss

Bocconi University - Department of Management and Technology

Klement Ahrensbach Rasmussen

Copenhagen Business School

Date Written: February 24, 2014

Abstract

Based on interviews in LEO Pharma, UCB Pharma and Novo Nordisk, we document how deep-seated changes in the pharmaceutical industry related to increasing demands from payers, the strengthening of the role of patients, changing legal demands, and declining technological opportunity, drive a process of experimenting with business model. We distinguish between three ideal types, namely a traditionalist model (exemplified by Novo Nordisk), the full-blown service-oriented model (UCB Pharma) and the in-between model (LEO Pharma). We describe the changes to the organizational design and management processes that accompany the ongoing process of changing business models in these firms.

Keywords: pharmaceutical industry, business model innovation, organizational design

JEL Classification: D22, I11, L65

Suggested Citation

Foss, Nicolai J. and Rasmussen, Klement Ahrensbach, Business Model Innovation in the Pharmaceutical Industry: The Supporting Role of Organizational Design (February 24, 2014). Available at SSRN: https://ssrn.com/abstract=2400982 or http://dx.doi.org/10.2139/ssrn.2400982

Nicolai J. Foss (Contact Author)

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

Klement Ahrensbach Rasmussen

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

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