Pammolli, Fabio and Riccaboni, Massimo (2004): Market Structure and Drug Innovation. Published in: Health Affairs , Vol. 23, No. 1 (2004): pp. 48-50.
Download (32kB) | Preview
An explosion of knowledge and a growing array of tools and technologies have transformed modern drug R&D, while its cost has risen by a sizable amount. At the same time, the unchecked increase in health care and prescription drug spending has spawned cost containment policies that are restricting the demand for drugs in all major markets. This Perspective explores the interplay between technological advances and regulatory policies and their likely impact on the dynamics of the pharmaceutical industry. Advances in the life sciences have profoundly transformed the drug research and development (R&D) process. That transformation has come at a price, boosting the cost of developing a new molecular entity (NME) to $802 million by 2000. More expensive R&D, combined with an aging population and better diagnostic techniques, has swelled drug spending in the United States, which reached $141 billion in 2001. These increases have in turn induced a spate of cost containment measures that are affecting demand for pharmaceuticals in all major markets. This Perspective considers the impact of the interplay between technological advances and health care policy on the future dynamics of the pharmaceutical industry.
|Item Type:||MPRA Paper|
|Original Title:||Market Structure and Drug Innovation|
|Keywords:||Pharmaceutical Industry, R&D Productivity, Health Care Policy|
|Subjects:||L - Industrial Organization > L6 - Industry Studies: Manufacturing > L65 - Chemicals ; Rubber ; Drugs ; Biotechnology
H - Public Economics > H5 - National Government Expenditures and Related Policies > H51 - Government Expenditures and Health
I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy ; Regulation ; Public Health
O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives
|Date Deposited:||02 Sep 2009 13:53|
|Last Modified:||12 Feb 2016 16:14|
DiMasi J., Hansen R.W., Grabowski H.G., 2003: "The Price of Innovation: New Estimates of Drug Development Costs" Journal of Health Economics 22, no. 2, 151–185.
PhRMA, Pharmaceutical Industry Profile, 2001 (Washington: PhRMA, 2001).
Gambardella A., Orsenigo L., Pammolli F., 2001: "Global Competitiveness in Pharmaceuticals: A European Perspective" Enterprise Paper no. 1 (Brussels: European Commission).
Berndt E.R., 2001: "The U.S. Pharmaceutical Industry: Why Major Growth in Times of Cost Containment?" Health Affairs, 100–114.
Gambardella A., 1995: Science and Innovation: The U.S. Pharmaceutical Industry during the 1980s (Cambridge: Cambridge University Press)
Galambos L., Sturchio J., 1996: "The Pharmaceutical Industry in the Twentieth Century: A Reappraisal of the Sources of Innovation," History and Technology 13, no. 2, 83–100.
Orsenigo L., Pammolli F., Riccaboni M., 2001: "Technological Change and Network Dynamics: Lessons from the Pharmaceutical Industry," Research Policy 30, no. 3, 485–508
Pammolli F., Riccaboni M., 2001: "Technological Regimes and the Growth of Networks: An Empirical Analysis," Small Business Economics 19, no. 2, 205–215.
Owen-Smith J., Riccaboni M., Pammolli F., Powell W.W., 2002: "A Comparison of U.S. and European University-Industry Relations in the Life Sciences," Management Science 48, no. 1, 24–43
Arora A., Fosfuri A., Gambardella A., 2001: Markets for Technology: The Economics of Innovation and Corporate Strategy (Cambridge, Mass.: MIT Press).
Arora A., Gambardella A., Pammolli F, Riccaboni M., 2001: "The Nature and the Extent of the Market for Technology in Biopharmaceuticals," Cahiers de l’Innovation no. 7 (Paris: Centre Nationale de la Recherche Scientifique).
Sutton J., 1998: Technology and Market Structure: Theory and History (Cambridge, Mass.: MIT Press)
Pammolli F. et al., 2001: "Innovation and Corporate Growth in the Evolution of the Pharmaceutical Industry," International Journal of Industrial Organization 19, no. 3, 1161–1187.
Acemoglu D., Linn J., 2003: "Market Size in Innovation: Theory and Evidence from the Pharmaceutical Industry," NBER Working Paper 10038 (Cambridge: National Bureau of Economic Research).