R&D in the Pharmaceutical Industry: A World of Small Innovations

Beatriz Domínguez, Juan-José Ganuza and Gerard Llobet

Working Papers from CEMFI

Abstract: It is commonly argued that in recent years pharmaceutical companies have directed their R&D towards small improvements of existing compounds instead of more risky drastic innovations. In this paper we show that the proliferation of these small innovations is likely to be linked to the lack of market sensitivity of a part of the demand to changes in prices. Compared to their social contribution, small innovations are relatively more profitable than large ones because they are targeted to the smaller but more inelastic part of the demand. We also study the effect of regulatory instruments such as price ceilings, copayments and reference prices and extend the analysis to competition in research.

Date: 2006
New Economics Papers: this item is included in nep-hea, nep-ino, nep-mic and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.cemfi.es/ftp/wp/0601.pdf (application/pdf)

Related works:
Journal Article: R& D in the Pharmaceutical Industry: A World of Small Innovations (2009)
Working Paper: R&D in the pharmaceutical industry: A world of small innovations (2005)
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: https://EconPapers.repec.org/RePEc:cmf:wpaper:wp2006_0601

Access Statistics for this paper

More papers in Working Papers from CEMFI Contact information at EDIRC.
Bibliographic data for series maintained by Araceli Requerey ().