10 - Glaxo Laboratories and the international development of the pharmaceutical industry

Summary

The Multinational pharmaceutical industry

In the post-war period, as the therapeutic revolution gathered momentum, it became imperative for pharmaceutical companies to market their unique, novel and patented products abroad as well as at home. The vast increase in the number of ethical drugs introduced after 1944 revealed that no country had a monopoly of the innovation or the production of drugs. Even a country such as the USA, with its large and innovative pharmaceutical corporations and its own vast market, was obliged to import ethical drugs. The worldwide need for medicines and the pressure for swift amortisation of the high investment in research were also strong incentives to export pharmaceuticals. Technological advantage often provided the first stimulus for pharmaceutical companies to internationalise. Import regulations and restrictions such as tariffs, quotas and bans imposed by governments for various economic and social reasons, spurred pharmaceutical companies on to establish foreign manufacturing establishments, as Glaxo's own overseas development before the Second World War (see chapter 5) illustrates.

Pharmaceutical companies differ from most other manufacturing businesses in their approach to multinational development. This is partly because of the unusual complexity and diversity of the local market conditions with which pharmaceutical companies are confronted. It is also partly inspired by the seniority of trained scientific personnel within the managerial hierarchies of pharmaceutical companies. Even when not directly or exclusively responsible for multinational strategy and organisation, the senior scientists nevertheless imbue the company culture with the need for clear, steady and coherent long-term views.