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...

Lanjouw and Schankerman (2004) proposed that patent quality is a key driver of R&D productivity but did not find supportive evidence for pharmaceuticals. This study revisits this hypothesis using OECD data for the period 1980-2000. It extends the literature in three ways: it develops new R&D...