Abstract
With the aging population, the increasing variety of diseases, drug expenditure is increasing, which means that the drug market is also expanding. Developing safe and effective new drugs for all mankind is constantly what we look for. The drug development and the approval process are lengthy and cumbersome. It takes an average of 10 years, investing hundreds of millions of dollars, from the research labs to the patients. Only 0.001% of invented drug was ever approved for human usage. As patents on many blockbuster drugs are about to expire, the FDA regulations become more stringent therefore the profit of pharmaceutical companies in recent years has dropped significantly. In order to reduce manpower and operating costs, speeding up the time-to-market process, more and more pharmaceutical companies tend to outsource research projects to Contract Research Organizations (CROs). CRO market size is estimated to reach $ 33.2 billion with 15% market growth rate per year in 2015. In recent years, international CRO companies focus on the development of branches especially in China and India because of the low cost, and superior talents of Asia-Pacific region. Taiwan government also actively laid out the CRO industry supply chain, integrating upstream and downstream services to grab the international pharmaceutical business opportunities. In addition, the complete CRO value chain will help accelerate the new drug development in Taiwan. In this study, through the Wuxi AppTec and QPS Taiwan cases, various strategies of M&A, joint ventures, strategic alliances or regulatory control were evaluated with the perspective of Resource Dependency Theory to explore how CROs were used to obtain a competitive advantage. The results of case study show that Wuxi AppTec focus more on direct investment, M&A, certification and intellectual property protection, the CEO’s contacts coordinate resources to increase the independence of the important resources and reduce the uncertainty of the competition. Based on its core competency with integrated downstream services, they both provided a “whole package” service. Combine with the successful factors of WuXi AppTec and the advantages of superior talents in Taiwan, CRO industry should spend their resources on the following tasks: cultivating R&D talents, improving the quality of service, enhancing innovation efficiency, and identifying niche markets. In addition, Taiwan CRO Center is proposed to cultivate drug discovery talents, to boost up R&D energy, and let the academic research found convert into a new drug more quickly than before.