New Product Development in the Pharmaceutical Industry: Evidence from Iran

Abstract

In today's competitive world, there are several strategies to deal with the fast changing environment, among which New product development (NPD) is a common strategy. However, almost half of the resources that companies devote to NPD are spent on products that may fail. This issue is particularly highlighted in the pharmaceutical industry mainly because of a long development-time, low success rate, high capital requirement, and market uncertainty in. This study identifies critical success factors of NPD based on the relevant literatures and expert opinions in Iranian pharmaceutical industry, then prioritizes them using the methodology of multiple criteria decision making (MCDM) through analyzing 50 filled questionnaires which is structured based on the AHP (Analytical Hierarchy Process) approach. Although the NPD success factors seem same in both generic and bio-generic pharmaceutical industries, the underlying factors and related sub-factors show the different importance in these two industries. However, this study reveal that, the "company capabilities" is the most important factor affecting new product development success in both pharmaceutical generic and bio-generic industry. The results of this study contribute to create baseline information for pharmaceutical industry especially Iranian pharmaceutical companies to be more effective in budget allocation on improving NPD success factors so that they can boost the success rate of NPD more effectively.