We provide causal evidence that regulatory shocks associated with drug safety label changes lead to aggregate demand declines of 16.9 percent within two years of a relabeling event. After accounting for all plausible substitution patterns by physicians along with competitor actions, aggregate...

We provide causal evidence that regulation induced product shocks significantly impact aggregate demand and firm performance in pharmaceutical markets. Event study results suggest an average loss between $569 million and $882 million. Affected products lose, on average, $186 million over their...

Venture capitalists (VCs) ideally like to invest in innovations at a nascent stage but this is inherently incorporated with huge risks (Ruhnka and Young 1991, Gompers 1995). Because it is difficult to value novel technologies at an early development stage, VCs may be herding into financing...

We evaluate the welfare effects of differential pricing, voluntary licensing, and compulsory licensing in the Indian market for oral anti-diabetic (OAD) drugs. This market includes a new class of molecules called DPP-4 inhibitors, all of which are under patent protection in India. The Indian...

Over the last decade, generic penetration in the U.S. pharmaceutical market has increased substantially, providing significant gains in consumer surplus. What impact has this rise in generic penetration had on the rate and direction of early stage pharmaceutical innovation? We explore this...