Skip to main content

Thank you for visiting nature.com. You are using a browser version with limited support for CSS. To obtain the best experience, we recommend you use a more up to date browser (or turn off compatibility mode in Internet Explorer). In the meantime, to ensure continued support, we are displaying the site without styles and JavaScript.

  • Outlook
  • Published:

Entry order as a consideration for innovation strategies

Nature Reviews Drug Discovery volume 5, pages 285–294 (2006)Cite this article

Abstract

Prior studies have defined an effect of market entry order on commercial success that depends on attributes of the underlying technology, the rate of change in technology improvement, consumer expectations of these attributes and the degree of unmet demand. Analyses of pharmaceutical sales data suggest that the commercial success of drugs is subject to similar forces. These findings have important implications for innovation strategies.

This is a preview of subscription content, access via your institution

Access options

Buy this article

  • Purchase on Springer Link
  • Instant access to full article PDF
Buy now

Prices may be subject to local taxes which are calculated during checkout

Figure 1: Pioneers dominate.
Figure 2: Early-entrant advantage is surmountable.
Figure 3: Follow-on drugs dominate.

Similar content being viewed by others

References

  1. Boulding, W. & Christen, M. Sustainable pioneering advantage? Profit implications of market entry order. Marketing Sci. 22, 317–392 (2003).

    Article  Google Scholar 

  2. Narasimhan, C. & Zhang, Z. J. Market entry strategy under firm heterogeneity and asymmetric payoffs. Marketing Sci. 19, 313–327 (2000).

    Article  Google Scholar 

  3. Lieberman, M. B. & Montgomery, D. B. First-mover (dis)advantages: retrospective and link with the resource-based view. Strategic Management J. 19, 1111–1125 (1998).

    Article  Google Scholar 

  4. Bohlmann, J. D., Golder, P. N. & Mitra, D. Deconstructing the pioneer's advantage: examining vintage effects and consumer valuations of quality and variety. Management Sci. 48, 1175–1195 (2002).

    Article  Google Scholar 

  5. Gittleman, M., ten Raa, T. & Wolff, E. N. The vintage effect in TFP-growth: an analysis of the age structure of capital. National Bureau of Economic Research Working Paper No. 9768 (2003).

  6. Carpenter, D. P. & Rynbrandt, R. T. Early entrant protection in U. S. pharmaceutical regulation. Harvard Working Paper [online] (2003).

    Google Scholar 

  7. Schmid, E. F. & Smith, D. A. Discovery, innovation and the cyclical nature of the pharmaceutical business. Drug Discov. Today 7, 563–568 (2002).

    Article  Google Scholar 

  8. Fischer, M., Leeflang, P. S. H. & Wittink, D. R. Modelling the time to and height of peak sales for pharmaceutical brands. Working paper, University of Kiel (2005).

  9. Shankar, V., Carpenter, G. S. & Lakshman, K. Late-mover advantage: how innovative late entrants outsell pioneers. J. Marketing Res. 35, 54–70 (1998).

    Article  Google Scholar 

  10. Fischer, M., Shankar, V. & Clement, M. Does a sound international market entry strategy benefit late movers? Working paper, University of Kiel (2005).

  11. Booth, B. L. & Zemmel, R. W. Quest for the best. Nature Rev. Drug Discov. 2, 838–841 (2003).

    Article  CAS  Google Scholar 

  12. Nordmann, J. P. et al. Unoprostone monotherapy study group-EU. A double-masked randomized comparison of the efficacy and safety of unoprostone with timolol and betaxolol in patients with primary open-angle glaucoma including pseudoexfoliation glaucoma or ocular hypertension. 6 month data. Am. J. Ophthalmol. 133, 1–10 (2002).

    Article  CAS  Google Scholar 

  13. Rosenberg, J. Head to head struggle: initial Celebrex, Vioxx ad spending, sales stunning. Advertising Age (03 April 2000).

    Google Scholar 

  14. Liebman, M. Head-to-head marketing: may the best promoted drug win. Medical Marketing & Media (01 November 2000).

    Google Scholar 

  15. Koerner, B. I. Disorders made to order: pharmaceutical companies have come up with a new strategy to market their drugs: first go out and find a new mental illness, then push the pills to cure it. Mother Jones (July–August 2002).

    Google Scholar 

  16. Levy, B. Consultant's report says 2004 will be pivotal in determining winners and losers in $6 billion ARB hypertension market. Business Wire (28 January 2004).

    Google Scholar 

  17. Winslow, R. Wonder drug: Sandoz Corp. 's Clozaril treats schizophrenia but can kill patients—and blood tests to prevent the lethal side effects are costly, controversial—who is going to pay $8,944? Wall Street J. pA1 (14 May 1990).

  18. Loew, C. Stimulating innovation in medical technologies. HHS Public Meeting [online] (8 November 2004).

    Google Scholar 

  19. Cohen, F. Macro trends in pharmaceutical innovation. Nature Rev. Drug Discov. 4, 78–84 (2005).

    Article  CAS  Google Scholar 

  20. Accenture & CMR International. Re-thinking innovation in pharmaceutical R&D. [online] (2005).

  21. Ma, P. & Zemmel, R. Value of novelty? Nature Rev. Drug Discov. 1, 571–572 (2002).

    Article  CAS  Google Scholar 

  22. DiMasi, J. A. & Paquette, C. The economics of follow-on drug research and development: trends in entry rates and the timing of development. Pharmacoeconomics 22 (Suppl. 2), 1–14 (2004).

    Article  Google Scholar 

Download references

Acknowledgements

The author wishes to thank Procter & Gamble Pharmaceuticals for its role in initiating and financially supporting the project that was the basis of this perspective; D. Fitzhenry, G. Glass and the anonymous reviewers for their insightful reviews of the manuscript; and M. Fischer for providing draft versions of his manuscripts.

Author information

Authors and Affiliations

  1. Pharma Growth Strategies, LLC, 13 Summit Square Center, #132, Langhorne, 19047-1098, Pennsylvania, USA

    Fredric J. Cohen M.D.

Authors
  1. Fredric J. Cohen M.D.
    View author publications

    You can also search for this author in PubMed Google Scholar

Ethics declarations

Competing interests

Procter & Gamble Pharmaceuticals provided financial support for part of the research included in the manuscript.

Related links

Related links

FURTHER INFORMATION

MIT Center for Biomedical Innovation

Tufts Center for the Study of Drug Development

Rights and permissions

Reprints and permissions

About this article

Cite this article

Cohen, F. Entry order as a consideration for innovation strategies. Nat Rev Drug Discov 5, 285–294 (2006). https://doi.org/10.1038/nrd2009

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1038/nrd2009

This article is cited by

Search

Advanced search

Quick links

Nature Briefing

Sign up for the Nature Briefing newsletter — what matters in science, free to your inbox daily.

Get the most important science stories of the day, free in your inbox. Sign up for Nature Briefing