Generic competition and the incentives for early-stage pharmaceutical innovation

Lee Branstetter, Chirantan Chatterjee and Matthew Higgins

Research Policy, 2022, vol. 51, issue 10

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 toward more biologic-based products and away from chemical-based products. We conclude by discussing potential implications of our results for long-run innovation policy.

Keywords: Pharmaceutical innovation; Generic entry; Nature of innovation; Innovation policy (search for similar items in EconPapers)
Date: 2022
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Related works:
Working Paper: Generic Competition and the Incentives for Early-Stage Pharmaceutical Innovation (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:51:y:2022:i:10:s0048733322001184

DOI: 10.1016/j.respol.2022.104595

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