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Industries in Europe

Competition, Trends and Policy Issues

Edited by Peter Johnson

This important book, a successor volume to European Industries, brings together a number of in-depth and authoritative studies of key European industries, providing fascinating insights into their nature and characteristics.
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Chapter 6: Pharmaceuticals

Paul Nightingale


Paul Nightingale INTRODUCTION The pharmaceutical industry is an R&D-intensive manufacturing sector of major European strength where Europe competes well with the US and significantly out-performs Japan.1 It is Europe’s fifth largest industrial sector producing approximately 3.5 per cent of total manufacturing production. However, changes in regulations and new scientific developments have the potential to shift the main locus of the sector across the Atlantic. This chapter looks at the history of the industry and explores the nature of the pharmaceutical market, the role of regulation and research, and the industry’s performance. A Brief Historical Sketch The European pharmaceutical industry has been a major world player since the nineteenth century and today provides the largest contribution to the European high-technology trade balance – $16.2 bn in 1998. The history of the industry suggests that changes in regulation, market demand and scientific knowledge can change how drugs are discovered and produce new organisational forms that are better at producing drugs than previous organisational structures. One of the first shifts from herbal to ‘modern’ drug discoveries was Jenner’s recognition in May 1796 that cowpox conferred immunity against smallpox. Its effective use required organisational changes and the Royal Jennerian Institute was established in 1803 to produce the vaccine lymph and develop new legislation. The effectiveness of natural product based drugs depends on the patient receiving a standardised dose of the active compound which can differ greatly between batches. Consequently, the early nineteenth century saw a shift towards the...

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