New book explores the tension between innovation and profiteering in UK Big Pharma
What are the prospects for the discovery of new drugs to save lives when pharmaceutical companies emphasise short-term profits over innovation? And how can the UK’s pharmaceutical industry sustain itself and grow if it doesn’t invest in its long-term future?
These tensions at the heart of Big Pharma are examined in a new book through an investigation of AstraZeneca and GlaxoSmithKline, two major UK pharmaceutical companies that over the last decade have undergone transformations in the way they are run.
In the 2000s the companies adopted a style of governance that emphasised financialisation, “stock buybacks”, and stock-based executive pay. Over the past decade they transitioned away from this model and moved towards an approach that increased investment in innovation.
The change in governance saw the end of buybacks to refocus on investing in an “innovative drugs pipeline.” Financial economists, corporate executives, and hedge-fund managers often suggest that profiteering encourages economic performance. However, the authors of the book argue that profiteering is instead central to ‘reinventing capitalism’, especially in the context of the health industry and its impact on human well-being.
From Financialisation to Innovation in UK Big Pharma is written by SOAS academic Antonio Andreoni, with Oner Tulum, and William Lazonick and is published by Cambridge University Press.
Padmashree Gehl Sampath, Director of Global Access in Action at Harvard University, said: “This fascinating book adeptly raises the alarm about how financialisation has impacted and continues to impact innovation and selection of R&D pipelines in the pharmaceutical sector.”
“Tracing the experiences of two of the largest global pharmaceutical companies, the authors unpack how financialization helps firms mete out rewards to senior executives beyond those justified by any value creation metrics.”
Meet the authors: Book launch at SOAS
A book launch and discussion will be held at the Brunei Gallery at SOAS at 5pm on Monday 6 March 2023. Attendees can also join the launch online. Further details on the events page.
Pictured: front cover of new book against abstract pharmaceutical themed backdrop.
About the Authors
Antonio Andreoni
Antonio Andreoni is a Professor of Development Economics at SOAS’s Department of Economics. He is also Visiting Professor at the South African Research Chair in Industrial Development, University of Johannesburg, and Honorary Professor at the UCL Institute for Innovation and Public Purpose, University College London. At SOAS, he is also College Convenor for Research and Knowledge Exchange for the Departments of Development Studies, Economics, Finance and Management and Chair of the School Knowledge Exchange Committee. Antonio has acted as an advisor to several multilateral organisations including UNIDO, UNCTAD, UNDP, ILO, UN ECA, World Bank and OECD, as well as national governments on industrial policy issues, including the European Commission, the UK, Finland, South Africa, Tanzania, Uganda, and Mauritius.
Öner Tulum
Öner Tulum is a Postdoctoral Research Associate at SOAS University of London and Senior Researcher at the Academic-Industry Research Network (theAIRnet). He completed his Ph.D. at the University of Ljubljana with funding from the European Union Horizon 2020 Research and Innovation Programme as part of the project, Innovation-fuelled Sustainable, Inclusive Growth (ISIGrowth) in Europe. His dissertation, “Innovation and Financialization in the U.S. Biopharmaceutical Industry,” examines the prevailing productivity crisis in the U.S. pharmaceutical industry and the impacts of financialization of the high-tech economy on the development and sustainability of organizational capabilities.
William Lazonick
William Lazonick, is an Emeritus Professor of Economics at the University of Massachusetts. He is Co-Founder and President of the Academic-Industry Research Network, a non-profit research organization. He is an Open Society Fellow and a Canadian Institute for Advanced Research Fellow. He has professorial affiliations with SOAS University of London and Institut Mines-Télécom in Paris. Previously, Lazonick was assistant and associate professor of economics at Harvard University, professor of economics at Barnard College of Columbia University, and distinguished research professor at INSEAD in France.
