Launch Decisions of Pharmaceutical Companies

European Journal of Economic and Political Studies 8 (2015) 35-58

24 Pages Posted: 3 May 2016

See all articles by Abdulkadir Civan

Abdulkadir Civan

Gediz University

Michael T. Maloney

Clemson University - John E. Walker Department of Economics

Date Written: 2015

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.

Keywords: Drug Launches; Intellectual Property Rights; Pharmaceutical R&D

JEL Classification: I12, I18

Suggested Citation

Civan, Abdulkadir and Maloney, Michael T., Launch Decisions of Pharmaceutical Companies (2015). European Journal of Economic and Political Studies 8 (2015) 35-58 . Available at SSRN: https://ssrn.com/abstract=2773503

Abdulkadir Civan (Contact Author)

Gediz University ( email )

Menemen
Izmir
Turkey

Michael T. Maloney

Clemson University - John E. Walker Department of Economics ( email )

Clemson, SC 29634
United States
864-656-3430 (Phone)
864-656-4192 (Fax)

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