Launch Decisions of Pharmaceutical Companies
Journal Title: Journal of Economics and Financial Analysis - Year 2017, Vol 1, Issue 1
Abstract
This paper models the launch decision of pharmaceutical companies in regard to new drugs and country markets. New drugs are launched with a delay or not launched at all in many countries. Considering that many of these new drugs would have created health benefits to the patients, there seems to be welfare loss. We use market characteristics to explain this phenomenon. We show that most of the estimated launch with a delay and no-launch decision is due to observable market characteristics. The model has an accuracy of 70 percent in explaining the no-launch decision. Intellectual property rights protection is especially important. The policy implication is that stronger property rights increase the likelihood and speed of new drug launch.
Authors and Affiliations
Abdulkadir Civan, Michael Maloney
Keywords
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