study is based on a chapter of my doctoral dissertation at the University of Heidelberg, Germany. Helpful comments by Clive Bell, Tony Venables, Jayashree Watal, and seminar participants at the World Trade Organization and World Bank are gratefully acknowledged. Any remaining errors are my own responsibility. The views, interpretations and conclusions expressed here are my own and they should n...

Pharmaceutical companies are facing several major interrelated challenges, the most strategic being the decline in R&D productivity resulting in empty product pipelines to replace products nearing patent expiry. A common response has been mergers and acquisition of competitors and biotechnology firms, but rather than resolving the problems, this has created new ones. While biotechnology promise...

In 2003, Congress introduced new legislation to subsidize prescription drug insurance for Medicare recipients; Medicare “Part D” will cost nearly $1 trillion over the next ten years. In this paper, I analyze the incidence of this subsidy by inferring producer surplus from the stock market returns to pharmaceutical firms. I first obtain a measure of the profitability of each brand-name drug from...

In today’s competitive world, there are several strategies to deal with the fast changing environment, among which New product development (NPD) is a common strategy. However, almost half of the resources that companies devote to NPD are spent on products that may fail. This issue is particularly highlighted in the pharmaceutical industry mainly because of a long development-time, low success r...

OBJECTIVES The United States and China are broadening health insurance coverage and increasing spending on pharmaceuticals, in contrast to other major economies that are reducing health spending and implementing a variety of drug price controls. This article analyzes the implications of health system reforms in the United States and China for national pharmaceutical markets. It follows a histor...

This paper examines the effect of the regulations restricting price increases on the evolution of pharmaceutical prices. A novel theoretical model shows that this policy leads firms to price new drugs with uncertain demand above the expected value initially. Price decreases after drug launch are more likely, the higher the uncertainty. We empirically test the model's predictions using data from...

     Todays, the parent company has a great role in managing and monitoring subsidiaries and companies in promoting their industrial activities. But, the main problem for pharmaceutical parent companies is the lack of clarity and confusion of responsibilities between units. Successful parenting needs to create the element of 'fit' between the ways parent operates – parent characte...

This paper examines the link between price regulation and pharmaceutical research and development (R&D) investment. I identify two mechanisms through which price regulation may exert an influence on R&D: an expected-profit effect and a cash-flow effect. Using established models of the determinants of pharmaceutical R&D, I exploit a unique fact to quantify firm exposure to pharmaceutical price r...

In the broadest sense, the Pharmaceutical Industry comprises various different business models which cover all or only some parts of the pharmaceutical product life cycle. Traditionally, the pharmaceutical industry segment was constituted by research-based pharmaceutical companies which had an integrated business model from the research laboratory to distribution, meaning they developed, manufa...