Name
Abstract | ||
|---|---|---|
It is commonly argued that in recent years pharmaceutical companies have targeted their research and development (R&D) at small improvements of existing compounds instead of riskier drastic innovations. In this paper, we show that the bias in the pharmaceutical industry toward small innovations might be driven by the low sensitivity of the demand. In particular, small innovations get a proportionally larger reward because pharmaceutical firms target them at the inelastic segments of the demand. As a consequence, firms find it relatively more profitable to invest in small innovations. We also study the effect on R&D incentives of marketing strategies and regulatory instruments aimed at controlling pharmaceutical expenditure. |
Year | DOI | Venue |
|---|---|---|
2009 | 10.1287/mnsc.1080.0959 | Management Science |
Keywords | Field | DocType |
small innovation,pharmaceutical industry,d incentive,pharmaceutical company,marketing strategy,innovation.,low sensitivity,health-care,small improvement,inelastic segment,small innovations,pharmaceuticals,pharmaceutical expenditure,pharmaceutical firm,marketing,health care,innovation,profitability | Health care,Economics,Pharmaceutical industry,Incentive,Microeconomics,Firm strategy,Industrial organization,Marketing | Journal |
Volume | Issue | ISSN |
55 | 4 | 0025-1909 |
Citations | PageRank | References |
1 | 0.39 | 1 |
Authors | ||
3 | ||
Name | Order | Citations | PageRank |
|---|---|---|---|
| Juan-josé Ganuza | 1 | 4 | 1.54 |
| Gerard Llobet | 2 | 1 | 0.72 |
| Beatriz Domínguez | 3 | 1 | 0.39 |