Title |
Pharmaceutical regulation in Europe and its impact on corporate R&D
|
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Published in |
Health Economics Review, October 2014
|
DOI | 10.1186/s13561-014-0023-5 |
Pubmed ID | |
Authors |
Stephan Eger, Jörg C Mahlich |
Abstract |
Many European countries regulate the markets for prescription drugs in order to cope with rising health expenditures. On the other hand, regulation distorts incentives to invest in pharmaceutical R&D. This study aims at empirically assessing the impact of regulation on pharmaceutical R&D expenditures. We analyze a sample of 20 leading pharmaceutical companies between 2000 and 2008. The share of sales in Europe serves as a proxy for the degree of pharmaceutical regulation. We control for other firm specific determinants of R&D such as cash flow, company size, leverage ratio, growth rate, and Tobin's q. Our results suggest a nonlinear relationship between European sales ratio and R&D intensity. Beyond a threshold of 33% of sales generated in Europe, a higher presence in Europe is associated with lower R&D investments. The results can be interpreted as further evidence of the deteriorating effect of regulation on firm's incentives to invest in R&D. |
X Demographics
Geographical breakdown
Country | Count | As % |
---|---|---|
United States | 1 | 13% |
Qatar | 1 | 13% |
Spain | 1 | 13% |
Unknown | 5 | 63% |
Demographic breakdown
Type | Count | As % |
---|---|---|
Members of the public | 7 | 88% |
Scientists | 1 | 13% |
Mendeley readers
Geographical breakdown
Country | Count | As % |
---|---|---|
Netherlands | 1 | 1% |
Unknown | 76 | 99% |
Demographic breakdown
Readers by professional status | Count | As % |
---|---|---|
Student > Master | 17 | 22% |
Student > Ph. D. Student | 13 | 17% |
Student > Bachelor | 11 | 14% |
Researcher | 6 | 8% |
Student > Doctoral Student | 2 | 3% |
Other | 8 | 10% |
Unknown | 20 | 26% |
Readers by discipline | Count | As % |
---|---|---|
Pharmacology, Toxicology and Pharmaceutical Science | 9 | 12% |
Business, Management and Accounting | 9 | 12% |
Economics, Econometrics and Finance | 7 | 9% |
Social Sciences | 7 | 9% |
Engineering | 5 | 6% |
Other | 16 | 21% |
Unknown | 24 | 31% |