Accessible Unlicensed Requires Authentication Published by De Gruyter April 9, 2009

The Effect of Price on Pharmaceutical R&D

Abdulkadir Civan and Michael T. Maloney

Abstract

This work extends prior research that finds drug development is driven by demand factors such as mortality rates of the diseases new drugs are aimed at. Here we find that the number of drugs in the development pipeline is strongly positively related to the price of existing drugs treating those diseases. This gives us a direct price elasticity measure from which we can draw some inference about the effect on new drug development that might occur if the pricing regime in the United States were to change.

Published Online: 2009-4-9

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