Market size and pharmaceutical innovation

• 成果类型: Article
• 署名作者: Dubois, Pierre; de Mouzon, Olivier; Scott-Morton, Fiona; Seabright, Paul
• 署名单位: Universite de Toulouse; Universite Toulouse 1 Capitole; Toulouse School of Economics; INRAE; Universite de Toulouse; Universite Toulouse 1 Capitole; Toulouse School of Economics; Yale University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12113
• 发表日期: 2015
• 页码: 844-871
• 关键词: medicare part d; price regulation; drug development; COMPETITION; entry

摘要

This article quantifies the relationship between market size and innovation in the pharmaceutical industry using improved, and newer, methods and data. We find significant elasticities of innovation to expected market size with a point estimate under our preferred specification of 0.23. This suggests that, on average, $2.5 billion is required in additional revenue to support the invention of one new chemical entity. This magnitude is plausible given recent accounting estimates of the cost of innovation of $800 million to $1 billion per drug, and marginal costs of manufacture and distribution near 50%.