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The Impact of Patenting on New Product Introductions in the Pharmaceutical Industry

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  • Stuart, Graham
  • Higgins, Matthew

Abstract

Since Comanor and Scherer (1969), researchers have been using patents as a proxy for new product development. In this paper, we reevaluate this relationship by using novel new data. We demonstrate that the relationship between patenting and new FDA-approved product introductions has diminished considerably since the 1950s, and in fact no longer holds. Moreover, we also find that the relationship between R&D expenditures and new product introductions is considerably smaller than previously reported. While measures of patenting remain important in predicting the arrival of product introductions, the most important predictor is the loss of exclusivity protection on a current product. Our evidence suggests that pharmaceutical firms are acting strategically with respect to new product introductions. Finally, we find no relationship between firm size and new product introductions.

Suggested Citation

  • 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.
  • Handle: RePEc:pra:mprapa:4574
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    File URL: https://mpra.ub.uni-muenchen.de/4574/1/MPRA_paper_4574.pdf
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    References listed on IDEAS

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    1. repec:hal:journl:halshs-00331211 is not listed on IDEAS
    2. Nelson, Andrew J., 2009. "Measuring knowledge spillovers: What patents, licenses and publications reveal about innovation diffusion," Research Policy, Elsevier, vol. 38(6), pages 994-1005, July.
    3. M. Lourdes Sosa, 2009. "Application-Specific R& D Capabilities and the Advantage of Incumbents: Evidence from the Anticancer Drug Market," Management Science, INFORMS, vol. 55(8), pages 1409-1422, August.
    4. Higgins, Matthew J. & Stephan, Paula E. & Thursby, Jerry G., 2011. "Conveying quality and value in emerging industries: Star scientists and the role of signals in biotechnology," Research Policy, Elsevier, vol. 40(4), pages 605-617, May.
    5. Matthew J. Higgins & Paula E. Stephan & Jerry G. Thursby, 2008. "Conveying Quality and Value in Emerging Industries: Star Scientists and the Role of Learning in Biotechnology," NBER Working Papers 14602, National Bureau of Economic Research, Inc.
    6. Hansen, Zeynep & Higgins, Matthew, 2007. "The Effect of Contractual Complexity on Technology Sourcing Agreements," MPRA Paper 4979, University Library of Munich, Germany.

    More about this item

    Keywords

    Patenting; Pharmaceutical industry; New product management; Research productivity;

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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