The advancement of technology in the biopharmaceutical industry has spearheaded the speed and scale of digitalization in various aspects. New drug development is becoming more complex, costly, and challenging. This paper examines how the pharmaceutical value chain model could integrate with the...

We provide evidence that risk aversion leads pharmaceutical firms to underinvest in radical andnovel innovation. We do so by introducing a new measure of novelty: a drug candidate is novelif it is molecularly distinct from prior candidates. Using our measure, we show that firms face arisk-reward...

We provide a theoretical framework to contribute to the current debate regarding the tendency of pharmaceutical companies to direct their R&D toward marketing products that are "follow-on" drugs of already existing drugs, rather than toward the development of breakthrough drugs. We construct a...