Determinants of radical drug innovation: a systematic literature review

Radical drug innovations are of great importance to pharmaceutical firms and public health. Understanding the determinants involved in successful radical drug innovations is key to increasing this type of output in the future. The objective of this review is to search the literature for key firm-level determinants of radical drug innovation. Following a systematic literature review approach, we considered more than 4100 peer-reviewed journal articles and PhD theses, of which we included 38 in the narrative synthesis. To guide the review, we use Crossan and Apaydin’s (J Manag Stud 47:1154–1191, 2010) model of firm-level determinants of innovation for the first time within the pharmaceutical industry, which is unique due to the risks, costs, and time frames associated with radical drug innovation. We focus on three groups of determinants: leadership, managerial levers, and business processes. We find the following to be particularly important for radical drug innovation: external knowledge sourcing (managerial lever); internal knowledge management (managerial lever); ability of top leaders to innovate, as determined by educational background and professional experience (leadership); and leaders’ focus on shaping innovation and performance cultures (leadership). We offer a conceptual framework of critical determinants of radical drug innovation and highlight managerial implications. We also discuss gaps in radical drug innovation research and provide suggestions for future study. Many of the findings discussed in this paper are contradictory because they rely on different definitions and measures, which inhibits our full and accurate understanding of radical drug innovation development. More research is needed to address untested measures of radical drug innovation.