The LSE Companion to Health Policy
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The LSE Companion to Health Policy

Edited by Alistair McGuire and Joan Costa-Font

The LSE Companion to Health Policy covers a wide range of conceptual and practical issues from a number of different perspectives introducing the reader to, and summarising, the vast literature that analyses the complexities of health policy. The Companion also assesses the current state of the art.
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Chapter 12: Do International Launch Strategies of Pharmaceutical Corporations Respond to Changes in the Regulatory Environment?

Nebibe Varol, Joan Costa-Font and Alistair McGuire


Nebibe Varol, Joan Costa-Font and Alistair McGuire 1. INTRODUCTION The purpose of this chapter is to investigate how the regulatory environment impinged on the launch strategies of pharmaceutical corporations across the main OECD markets during 1960–2008. How regulation affects adoption of innovation is a question open to empirical scrutiny, especially in highly regulated industries such as the pharmaceutical industry where products and processes are protected by intellectual property rights. Although several studies have been carried out, the existing evidence in the pharmaceutical context is limited. Particularly important is the role of the timing of a new drug launch, which is typically carried out by international companies following some corporate strategy. Paradoxically, the impact of regulation on generic products within a therapeutic group has received even less attention. Expected proliferation of bioequivalent products in the near future, rising concerns over cost containment and the resulting push for genericisation makes timing of generic launch a question of interest for both the pharmaceutical industry and the policy makers. Normally, firms facing a competitive environment would ideally like to launch new chemical entities (NCE) as quickly as possible into several markets while the product is still under patent protection to amortise the substantial R&D outlays. However, there are at least two regulatory hurdles that firms have to overcome before commercialising a new drug product. The first hurdle is that manufacturers have to prove the threefold requirement of quality, safety and efficacy of new molecules, which is estimated to take around ten years...

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