World Economics - Insight , Analysis and Data

World Economics - Insight , Analysis and Data
Economic Drivers of Pharmaceutical Investment Location
David Lewis, Edward Bramley-Harker & Joshua Farahnik
World Economics, September 2007

The article examines the range of economic factors that underlie decision making about the location of investments by research-based pharmaceutical companies. Set in the context of the commercial challenges facing the industry, structured interviews with 34 senior executives in pharmaceutical companies examined hypothetical investment scenarios. Unsurprisingly, both cost and quality factors are important to decision making, but their nature and relative importance depend heavily on the type of investment being considered. For some investments, particularly in high value research, quality may be paramount. In other matters quality remains important but a wide and increasing range of locations are able to deliver acceptable levels of quality, so cost becomes much more relevant.
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