Abstract
This study examines what is generally regarded to be the most important measure of innovation in the pharmaceutical industry—the extent to which new drugs are developed and marketed by pharmaceutical firms. Pharmaceutical industry output, as measured by new chemical entity (NCE) approvals in the United States since the 1962 Amendments to the Federal Food, Drug, and Cosmetic Act of 1938, is examined at the firm level. This long-term historical perspective permits us to observe the extent to which this industry has been concentrated with respect to innovative output and how stable company leadership positions have been over time. Databases containing detailed information on all NCEs approved in the United States from 1963 to 1999 and on a large sample of investigational NCEs taken into clinical testing since 1963 were utilized to examine productivity in developing new products at the firm level according to the following stratifications: period of approval, therapeutic class, whether the compounds were self-originated (ie, developed by one firm) or acquired (eg, licensed), and Food and Drug Administration ratings of therapeutic significance. The data indicate that innovation in the pharmaceutical industry is fairly widely dispersed and has become less concentrated over time. Turnover in company rankings based on the number of new drug introductions is substantial. Nonetheless, firms have differed in the productivity of their development programs and some firms have consistently maintained high ranks for their level of innovative output over a lengthy period.
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DiMasi, J.A. New Drug Innovation and Pharmaceutical Industry Structure: Trends in the Output of Pharmaceutical Firms. Ther Innov Regul Sci 34, 1169–1194 (2000). https://doi.org/10.1177/009286150003400425
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DOI: https://doi.org/10.1177/009286150003400425