Towards a History Friendly Model of Innovation, Market Structure and Regulation in the Dynamics of the Pharmaceutical Industry: the Age of Random Screening
In this paper we present a model of the long term dynamics of market structure and innovation in the pharmaceutical industry in a history friendly way. Our results show a strong increase in concentration in each therapeutic area, but a rather low level of concentration in the overall market. Innovative firms continue to maintain a key role. Both demand growth and increase in technological opportunities have similar effects on the role of innovative firms, exploration and total quality, but a contrasting effects on concentration (positive for demand growth, and less so for technological opportunities). We have also explored different situations of patent protection. As expected, an increase in patent protection increase concentration but decreases exploration, while the opposite holds for no patent protection. Interestingly enough, an increase in patent protection is not able to countervail the negative effects of no growth in demand as far as quality and exploratory activities are concerned. Finally, an increase in the cost of research or in the stringency of approval procedures have quite different effects on concentration, exploration and quality: the first increases concentration and reduces quality, the second does not affect concentration, but affects negatively exploration as well as quality.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
Publisher Info
Paper provided by CESPRI, Centre for Research on Innovation and Internationalisation, Universita' Bocconi, Milano, Italy in its series CESPRI Working Papers with number
124.
Length: 36 pages Date of creation: May 2000 Date of revision:
Jan 2001 Handle: RePEc:cri:cespri:wp124
Note: A previous version of this model was presented at the Conference in Honour of Paul David: "New Frontiers in the Economics of Innovation and New Technologies", Turin, May 2000. Contact details of provider: Postal: via Sarfatti, 25 - 20136 Milano - Italy Phone: +39.025836.3397 Fax: +39.025836.3399 Web page: http://www.cespri.unibocconi.it/
Order Information: Postal: E G E A - via R. Sarfatti, 25 - 20136 Milano -Italy
For technical questions regarding this item, or to correct its listing, contact: (Roberta Ometti).
Find related papers by JEL classification: L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General O34 - Economic Development, Technological Change, and Growth - - Technological Change - - - Intellectual Property Rights
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.:
Did you know? You can include your works in the database easily by uploading them on the Munich Personal RePEc Archive (MPRA) if you do not have access to an institutional RePEc archive.