Determinants of PRO-industry interactions in pharmaceutical R&D: the case of Mexico

Interactive learning, particularly between firms and public research organizations (PRO), nurtures the dynamics of systems of innovation. Limited interaction contributes to explain poor performance in R&D and ultimately, in innovation by developing countries. But why this is so? Based on evidence from the pharmaceutical industry in Mexico, this paper identifies some determinants of PRO-industry interaction for pharmaceutical R&D. Particular attention is granted to factors hindering such interactions; arguably the barriers differ throughout the diverse stages of the R&D process. The paper decomposes the Research and Development processes, thus it is possible to identify determinants to interactions in each of those instances. Drug development is further split in two stages: clinical research and drug manufacturing. The analysis indicates that macroeconomic and business environments, firms' strategies, ethical considerations, incentives and perceptions of PRO-industry interaction among the agents in the system, support/hinder interactivity in pharmaceutical R&D.