Advanced Search
MyIDEAS: Login to save this article or follow this journal

Effects of profit-reducing policies on firm survival, financial performance, and new drug introductions in the research-based pharmaceutical industry

Contents:

Author Info

  • Darren Filson

    (Claremont Graduate University, 160 E. Tenth Street, Claremont, CA 91711, USA)

  • Neal Masia

    (Pfizer Inc, New York, NY, USA)

Abstract

We introduce a computational model of the evolution of a value-maximizing research-based pharmaceutical firm and parameterize it using estimates of R&D costs, profit distributions, and candidate attrition rates. We use the model to estimate how the probability of surviving and covering the costs of R&D depends on R&D scale and the policy regime. In the model, even small reductions in profitability have substantial impacts on firm success and innovation, but the effects may not be visible to consumers for many years. Smaller and newer firms are most vulnerable to reductions in the rewards for innovation. Copyright © 2007 John Wiley & Sons, Ltd.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://hdl.handle.net/10.1002/mde.1344
File Function: Link to full text; subscription required
Download Restriction: no

Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

Volume (Year): 28 (2007)
Issue (Month): 4-5 ()
Pages: 329-351

as in new window
Handle: RePEc:wly:mgtdec:v:28:y:2007:i:4-5:p:329-351

Contact details of provider:
Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976

Related research

Keywords:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Filson, Darren & Gretz, Richard T., 2004. "Strategic innovation and technology adoption in an evolving industry," Journal of Monetary Economics, Elsevier, Elsevier, vol. 51(1), pages 89-121, January.
  2. Eric J. Bartelsman & Wayne Gray, 1996. "The NBER Manufacturing Productivity Database," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0205, National Bureau of Economic Research, Inc.
  3. Frank R. Lichtenberg & Joel Waldfogel, 2003. "Does Misery Love Company? Evidence from pharmaceutical markets before and after the Orphan Drug Act," NBER Working Papers 9750, National Bureau of Economic Research, Inc.
  4. DiMasi, Joseph A. & Hansen, Ronald W. & Grabowski, Henry G., 2003. "The price of innovation: new estimates of drug development costs," Journal of Health Economics, Elsevier, Elsevier, vol. 22(2), pages 151-185, March.
  5. Cockburn, Iain M. & Henderson, Rebecca M., 2001. "Scale and scope in drug development: unpacking the advantages of size in pharmaceutical research," Journal of Health Economics, Elsevier, Elsevier, vol. 20(6), pages 1033-1057, November.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:28:y:2007:i:4-5:p:329-351. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.