International Business and Strategy Professor Denise Dunlap Contributes to UN Report

Denise Dunlap, professor of international business and strategy at Northeastern University’s College of Business Administration, Boston, MA, and Ram Mudambi, professor of strategy and international business at Temple University recently provided the United Nations with expert advice and information on licensing in the global pharmaceutical market. They were acknowledged for their contribution in this year’s World Investment Report 2011, specifically Chapter Four on Non-Equity Modes of International Production and Development.

This year’s UN report gives an industry overview and talks about emerging markets in relation to competitive business markets. Businesses are looking for non-equity ways to invest internationally. The report breaks down the different roles of non-equity investments in relation to agriculture, hotel, pharmaceuticals, and others.

Dunlap and Mudambi’s research expertise is in the pharmaceutical industry. They were selected for the team in order to provide assistance and advice on the topics related to non-equity modes of international cross-border operations production as related to the pharmaceutical industry. For instance, they generated and provided information on the global distribution of licensures over developed versus developing or emerging countries. They also looked at the perspective of developing countries looking for licensures in the United States, and other established centers of the industry like the UK and Switzerland.

Non-equity investments are a mode of investment in which the investing party does not take an ownership position in the operating enterprise. In the pharmaceutical industry, escalating costs and regulatory hurdles are pushing firms to build research and development partnerships in the global market, rather than going it alone. This allows a company to avoid the expense of building and running an enterprise, be it R&D or marketing and distribution, in a foreign country. Instead the firm can license with an existing one to develop a new product or market an extant one, without having to invest in operations, labor, and management.

The research prepared by Dunlap and Mudambi explores licensing in the entire value chain of the global pharmaceutical industry. It breaks it down into the areas of global sales, top companies worldwide, trends in strategic activity, top drugs by sales, and corporate strategy with regard to licensing. They provided advice on the impact of pharmaceutical licensing on host countries.

With regard to this topic, Dunlap and Mudambi started at the beginning, with basic research and data gathering. They provided the UN with a full report on licensing with a specific focus on pharmaceuticals. With able research assistance from Ph.D. students Thomas J. Hannigan and Snehal Awate, they did case studies on two of the BRIC countries, India and Brazil that develop and produce generic drugs. A major source of information that they used was the Pharmaprojects database. Dunlap obtained access to this database using a grant, which further expanded upon her PhD dissertation.

The process of being on the UN team was all encompassing and a truly a special honor for Dunlap. With other esteemed colleagues and experts in the field, Dunlap sat in on a two-day conference where contributors were asked to provide their feedback on the UN’s working WIR 2011 draft. In an open forum, contributors were called upon to clarify the specifics of their own data, and that of others. Dunlap recounts that they were asked to comment on anything and everything, not just the facts, but also the flow of the piece, interest of the audience and general editing.

Then Dunlap sat at round table discussions where they worked on specific sections with a writer to enhance and clarify areas. They were always in contact with the writers, so they could be called upon at any point to clarify or comment further.

After reading the draft, working on the finer points, and reading the final product, Dunlap believes that the UN report on licensing in the global pharmaceutical market “got it right” with the “licensing in particular.” She goes on to say that non-equity investments are still an up and coming topic and for this report being the first of it’s kind, it will become more and more important now that it has been highlighted. She thinks it may have a dramatic effect, leading to more and more licensures internationally.