This paper examines the idea that the USA has outshined Europe in the race for new medicines as a result of a flight of business R&D expenditure to the USA. It adopts a methodology that accounts for R&D price inflation, considers the role of both ‘performed' R&D and ‘extra-mural' R&D, and...

This paper merges patent citation data with data on pharmaceutical patent expirations, generic entry, and pricing to explore the effects of observable patent characteristics on off-patent and on-patent pharmaceutical pricing. Using a sample of drug patents facing generic entry in the 1990s, I...

How does a firm’s market power in existing products affect its incentives to innovate? We explore this fundamental question using granular project-level and firm-level data from the pharmaceutical industry, focusing on a particular mechanism through which incumbent firms maintain their market...

The global pharmaceutical industry is in an era of greater uncertainty because of looming patent expiries of established drugs having a direct impact on their sales and profitability. Further discovering new drugs in-house is a risky, time consuming and expensive proposition. This has forced...

Pharmaceutical firms typically enjoy market exclusivity for new drugs from concurrent protection of the underlying invention (through patents) and the clinical trials data submitted for market approval (through data exclusivity). Patent invalidation during drug development renders data...

Thanks to a combination of scientific advances and economic incentives, the development of therapeutics to treat rare or “orphan” diseases has grown dramatically in recent years. With the advent of FDA-approved gene therapies and the promise of gene editing, many experts believe we are at an...

Within the last decades, there have been many technological and regulatory changes in the pharmaceutical industry. Some of these developments facilitate the innovative activities of large firms, while others foster small firms. It is therefore surprising that the implications of these changes in...

In the context of the ongoing debate about an innovation crisis in the pharmaceutical industry, we study the success rates of pharmaceutical R&D projects as a measure of innovative productivity. The empirical literature suggests success rates have been decreasing during recent decades. We...

Policy makers need reliable estimates of direct costs of pharmaceutical R&D, in order to contain health-care costs and at the same time maintain a supportive environment for investment in research. This paper evaluates the application of parametric estimating methods to the late stage clinical...