The potential for Knowledge Management to deliver cost benefits has not escaped the notice of the pharmaceutical companies. Research by Hung et al., (2006), Wang (2005), Davenport & Peitsch (2005) and Metaxiotis & Psarras (2005), amongst others, espouse the virtues of adopting pharmaceutical Knowledge Management, but conclude that Knowledge Management in practice is a rather subdued affair and rarely fulfils on its promise. Pharmaceutical studies by Hung et al. (2006) suggest that although Knowledge Management technology is in place within major companies, the cohesive integration of Knowledge Management practices falls behind and may even hinder knowledge exchange.
Critics of Knowledge Management are quick to point out that it is, in reality, a management fad representing little more than a revamped facet of information management (Wilson, 2002).
However; the sheer wealth of published Knowledge Management literature within other industries (e.g. Un & Cuervo-Cazurra, 2004) and the interest in Knowledge Management within the pharmaceutical industry organisations (Roth, 2003), suggests fad or not, Knowledge Management research is at least worthy of attention. This is particularly emphasised by research from The Association of British Pharmaceutical Industry (2006) which indicates that British pharmaceutical manufacturers invested £3.2 billion in 2004 in R&D alone. With the average drug requiring £550 million of investment and with no guarantee of success, the appeal of cutting development times and using employee knowledge more efficiently is obvious. Yes, the advances in drug development technology (e.g. High Throughput Screening) and computing power are improving the capture and analysis of information and data (Donelly, 2003), but the impact of Knowledge Management on the knowledge required to utilise and act on this data and information within the drug development processes is rather less apparent.
The slow shift in the approach of Knowledge Management from the management of the tacit knowledge of the employee, to a holistic organisational ‘capability’ approach (Argote et al. 2003) would appear to hold promise. However, assigning metrics to measure and validate the performance of a Knowledge Management strategy still remains ambiguous and notoriously difficult (Marr & Starovic, 2003). As Knowledge Management is evolving, the means to measure knowledge is also evolving in tandem. The Intellectual Capital approach favoured by authors such as Kaplan & Norton (2001) and Edvinsson and Malone (1997) assigns measurable value to knowledge driven activities, yet to date, little work has been conducted that specifically targets pharmaceutical innovation and drug development.