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Research Expenditures and the Discovery of New Drugs

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  • Jensen, Elizabeth J

Abstract

This paper examines technical change in the ethical pharmaceutical industry. A Poisson specification is used to estimate a productivity relationship between research expenditures and drug discoveries, thus taking into account the integer nature of the data. The result s of estimations using panel data indicate that there is a positive c orrelation between a firm's research and development intensity and it s probability of discovering a new drug. Firm size, however, does not significantly affect the marginal productivity of research expenditu res. Finally, the estimates show that an increase in regulatory strin gency decreases the expected number of new drug discoveries. Copyright 1987 by Blackwell Publishing Ltd.

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  • Jensen, Elizabeth J, 1987. "Research Expenditures and the Discovery of New Drugs," Journal of Industrial Economics, Wiley Blackwell, vol. 36(1), pages 83-95, September.
  • Handle: RePEc:bla:jindec:v:36:y:1987:i:1:p:83-95
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    References listed on IDEAS

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    1. Richard E. Just & Wen S. Chern, 1980. "Tomatoes, Technology, and Oligopsony," Bell Journal of Economics, The RAND Corporation, vol. 11(2), pages 584-602, Autumn.
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    Cited by:

    1. Burak Dindaroglu, 2011. "R&D Productivity and Firm Size in Semiconductors and Pharmaceuticals: Evidence from Citation Yields," Working Papers 1101, Izmir University of Economics.
    2. repec:spr:scient:v:88:y:2011:i:2:d:10.1007_s11192-011-0396-8 is not listed on IDEAS
    3. Banri ITO & Tatsufumi YAMAGATA, 2007. "Who Develops Innovations In Medicine For The Poor? Trends In Patent Applications Related To Medicines For Hiv/Aids, Tuberculosis, Malaria, And Neglected Diseases," The Developing Economies, Institute of Developing Economies, vol. 45(2), pages 141-171.
    4. Papachristos, George & Adamides, Emmanuel, 2016. "A retroductive systems-based methodology for socio-technical transitions research," Technological Forecasting and Social Change, Elsevier, pages 1-14.
    5. Sachon, Marc & Paté-Cornell, Elisabeth, 2002. "Managing technology development for safety-critical systems," IESE Research Papers D/465, IESE Business School.
    6. repec:spr:scient:v:59:y:2004:i:1:d:10.1023_b:scie.0000013304.40957.0d is not listed on IDEAS
    7. repec:spr:scient:v:80:y:2009:i:3:d:10.1007_s11192-009-2095-2 is not listed on IDEAS
    8. Geisler, E., 1995. "An integrated cost-performance model of research and development evaluation," Omega, Elsevier, pages 281-294.
    9. Rebecca Henderson & Iain Cockburn, 1993. "Scale, Scope and Spillovers: The Determinants of Research Productivity in the Pharmaceutical Industry," NBER Working Papers 4466, National Bureau of Economic Research, Inc.
    10. James W. Hughes & Michael J. Moore & Edward A. Snyder, 2002. ""Napsterizing" Pharmaceuticals: Access, Innovation, and Consumer Welfare," NBER Working Papers 9229, National Bureau of Economic Research, Inc.
    11. Sangjoon Lee & Jinyoung Kim, 2004. "Research Scientist Productivity and Firm Size: Evidence from Panel Data on Inventors," Econometric Society 2004 Far Eastern Meetings 465, Econometric Society.
    12. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters,in: R&D and Productivity: The Econometric Evidence, pages 287-343 National Bureau of Economic Research, Inc.
    13. 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, pages 1033-1057.
    14. Antonio Revilla & Zulima Fernández, 2013. "Environmental Dynamism, Firm Size and the Economic Productivity of R&D," Industry and Innovation, Taylor & Francis Journals, pages 503-522.
    15. Tomas J. Philipson & George Zanjani, 2013. "Economic Analysis of Risk and Uncertainty induced by Health Shocks: A Review and Extension," NBER Working Papers 19005, National Bureau of Economic Research, Inc.
    16. Stuart, Graham & Higgins, Matthew, 2007. "The Impact of Patenting on New Product Introductions in the Pharmaceutical Industry," MPRA Paper 4574, University Library of Munich, Germany.
    17. Zhang, Sifei & Yuan, Chien-Chung & Chang, Ke-Chiun & Ken, Yun, 2012. "Exploring the nonlinear effects of patent H index, patent citations, and essential technological strength on corporate performance by using artificial neural network," Journal of Informetrics, Elsevier, pages 485-495.
    18. Bauer, Hans H. & Fischer, Marc, 2000. "Product life cycle patterns for pharmaceuticals and their impact on R&D profitability of late mover products," International Business Review, Elsevier, pages 703-725.
    19. Beneito, Pilar, 2006. "The innovative performance of in-house and contracted R&D in terms of patents and utility models," Research Policy, Elsevier, pages 502-517.
    20. repec:spr:scient:v:89:y:2011:i:3:d:10.1007_s11192-011-0471-1 is not listed on IDEAS
    21. Henderson, Rebecca. & Cockburn, Iain., 1993. "Scale, scope and spillovers : the determinants of research productivity in ethical drug discovery," Working papers 3629-93., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    22. Patricia M. Danzon & Eric L. Keuffel, 2014. "Regulation of the Pharmaceutical-Biotechnology Industry," NBER Chapters,in: Economic Regulation and Its Reform: What Have We Learned?, pages 407-484 National Bureau of Economic Research, Inc.

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