Generic Competition and the Incentives for Early-Stage Pharmaceutical Innovation

Lee Branstetter, Chirantan Chatterjee and Matthew Higgins

No 20532, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: What impact has rising generic competition had on the nature and direction of pharmaceutical innovation? We find broad-based, strong evidence that pharmaceutical companies have diverted their new drug development efforts away from therapeutic markets already well-served by generic drugs. We also find that increasing generic competition induces firms to shift their R&D activity towards more biologic-based products and away from chemical-based products. We conclude by discussing potential implications of our results for long-run innovation policy.

JEL-codes: D2 L5 L51 L65 M2 (search for similar items in EconPapers)
Date: 2014-09
New Economics Papers: this item is included in nep-com, nep-ent, nep-hea, nep-ino, nep-ipr and nep-pr~
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Citations: View citations in EconPapers (7)

Published as Lee Branstetter & Chirantan Chatterjee & Matthew J. Higgins, 2022. "Generic competition and the incentives for early-stage pharmaceutical innovation," Research Policy, vol 51(10).

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