Pharmaceutical firms should focus on intellectual capital, says prof

Woman scientist holding red pill

New research from York University’s Schulich School of Business shows that firms operating in the pharmaceutical industry are most often better off investing in intellectual capital than in lobbying.

Moren Lévesque
Moren Lévesque

The findings are contained in the paper “The interdependent influence of lobbying and intellectual capital on new drug development,” which was recently published in the journal Research Policy. The paper was co-authored by Moren Lévesque, a professor of operations management and information systems at Schulich and the CPA Ontario Chair in International Entrepreneurship.

The results of the study have important practical implications for pharmaceutical companies, which are among the top lobbying spenders in the U.S. “From a managerial perspective, our results suggest that lobbying might not always be the most effective way for pharmaceutical firms to enhance their new drug development performance,” says Lévesque. “A shift in focus from lobbying to intellectual capital development may therefore enable firms to reap longer term benefits, both in terms of new drug development and reputation.”

Lévesque says the research also has clear implications for policymakers, who should focus on nurturing intellectual capital development in the pharmaceutical industry to achieve economic growth, as well as focusing on increased transparency with regard to lobbying and the political decision-making process.   

With declining R&D [research and development] productivity being of increased concern to the industry, understanding how to allocate scarce and precious resources is vital,” says Lévesque. “Our research findings might prompt decision-makers in pharmaceutical firms to carefully review their portfolio of activities and redirect resources from lobbying to R&D.”