Open AccessProduct Complexity and Strategic Alliance on Drug Approval
Author(s) -
Taoyong Su,
Wanrong Hou,
Edward Levitas,
Sibin Wu
Publication year - 2021
Publication title -
american business review
Language(s) - English
Resource type - Journals
eISSN - 2689-8810
pISSN - 0743-2348
DOI - 10.37625/abr.24.1.36-53
Subject(s) - alliance , food and drug administration , business , harmony (color) , government (linguistics) , marketing , strategic alliance , pharmaceutical industry , industrial organization , product (mathematics) , pharmacology , risk analysis (engineering) , medicine , political science , art , linguistics , philosophy , geometry , mathematics , law , visual arts
Management of the business-government relationship is critical for firm performance in regulated industries. In this paper, we predict a U-shaped relationship between product complexity and the time to approval by the US Food and Drug Administration (FDA). Moreover, we argue that this association is contingent on the types of strategic alliances (i.e., R&D alliance, Marketing alliance) of the focal firm in that those alliances help FDA and pharmaceutical companies achieve harmony. Using the approved drugs by FDA from 1999 to 2016 as the sample, our hypotheses are supported by the empirical analysis on US pharmaceutical firms. The findings have important implications to achieving harmony between pharmaceutical firms and regulatory agencies.