Are the Economics of Pharmaceutical Research and Development Changing? Productivity, Patents and Political Pressures

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In this Subject: Pharmacology
By this author: Henry Grabowski

Author: Henry Grabowski

Source: PharmacoEconomics, Volume 22, Supplement 2, 2004 , pp. 15-24(10)

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Abstract:

Pharmaceutical research and development (R&D) competition in the 1980s and 1990s was characterised by rising R&D expenditures, favourable returns to innovators and the introduction of many new classes of drugs with high social benefits. However, in the past 3 years, the number of new drug introductions has been well below the historical trend, while the cost per new drug continues to increase. In addition to lagging R&D productivity, the industry has been characterised by other economic and policy uncertainties. These include a wave of early patent challenges and growing political pressure to contain pharmaceutical expenditures. This paper examines the consequences of these developments.

Document Type: Review article

Affiliations: 1: Department of Economics, Duke University, Durham, North Carolina, USA

Publication date: 2004-01-01