The Changing Governance Structures of the Global Pharmaceutical Value Chain

Author: Haakonsson, Stine Jessen

Source: Competition & Change, Volume 13, Number 1, March 2009 , pp. 75-95(21)

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Abstract:

The pharmaceutical industry was originally led by vertically-integrated and technology-intensive transnational corporations (TNCs). The TNCs maintained production in their home countries with little foreign direct investment into the larger markets. In this sense, the industry was internationalised, but not yet globalised. With the implementation of the WTO TRIPs Agreement, the pharmaceutical industry became globalised and its value chain was reorganised into three different strands: a producer-driven strand for branded products, a buyer-driven strand for quality generics, and a strand for low-value generics which is not driven. This paper examines these changes through the lenses of GVC governance, suggesting a need to look for different dynamics of governance as they apply to different value chain strands.

Keywords: PHARMACEUTICAL INDUSTRY; PHARMACEUTICALS; GLOBAL VALUE CHAINS; GOVERNANCE; WTO; TRIPS AGREEMENT

Document Type: Research Article

DOI: http://dx.doi.org/10.1179/102452909X390574

Publication date: 2009-03-01

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