Economics at your fingertips  

Innovation crisis in the pharmaceutical industry? A survey

Ute Laermann-Nguyen () and Martin Backfisch ()
Additional contact information
Ute Laermann-Nguyen: Philipps University Marburg, Research Group Economic Policy
Martin Backfisch: Baden-Wuerttemberg Cooperative State University

SN Business & Economics, 2021, vol. 1, issue 12, 1-37

Abstract: Abstract In the literature, it is widely discussed whether the pharmaceutical industry is going through an innovation crisis. Unfortunately, no comprehensive review exists to date that outlines the main empirical findings. In this paper, we provide an extensive survey on what is currently known about the crisis and its reasons. The empirical evidence shows that project success rates decreased over time, while attrition rates, development times, and the costs per new drug increased. The reasons for these developments are quite complex. The crisis seems to have largely technological causes. The enormous scientific progress in biotechnology and related disciplines has increased the opportunities to treat diseases, but the firms have difficulties transforming these advances into new and effective medicines. More basic research is necessary and the links between science and industry should be strengthened. Some measures have recently been taken to better adapt the approval process to current developments. However, the persistently high number of consolidations in the industry seems to have largely detrimental effects.

Keywords: Innovation; R&D; Pharmaceutical industry; Drug development (search for similar items in EconPapers)
JEL-codes: L65 O31 O32 O38 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

DOI: 10.1007/s43546-021-00163-5

Access Statistics for this article

SN Business & Economics is currently edited by Gino D'Oca

More articles in SN Business & Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

Page updated 2022-05-12
Handle: RePEc:spr:snbeco:v:1:y:2021:i:12:d:10.1007_s43546-021-00163-5