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John M Vernon
Duke University
Public economicsEconomicsMicroeconomicsPharmaceutical industryIndustrial organization
40Publications
19H-index
2,096Citations
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Publications 40
Newest
#1Joseph A. DiMasi (Tufts Center for the Study of Drug Development)H-Index: 26
#2Henry G Grabowski (Duke University)H-Index: 39
Last. John M Vernon (Duke University)H-Index: 19
view all 3 authors...
Objectives: This study examines the degree to which therapeutic class accounts for variability in drug development costs. It also scrutinizes how sales levels vary across the associated therapeutic classes for those drugs that have reached the marketplace. Data and Methods: A stratified random sample of 68 investigational drugs that first entered clinical testing anywhere in the world from 1983 to 1994 was selected from the pipelines of 10 pharmaceutical firms. Clinical period cost data were obt...
93 CitationsSource
#1Henry G Grabowski (Duke University)H-Index: 39
#2John M Vernon (Duke University)H-Index: 19
Last. Joseph A. DiMasi (Tufts University)H-Index: 26
view all 3 authors...
Background: Previously published research by the authors found that returns on research and development (RD indications that RD new market strategies of major firms aimed at simultaneous launches across world markets; and the increased attention focused on the pharmaceutical industry in the political arena.
221 CitationsSource
#1Henry G GrabowskiH-Index: 39
#2John M VernonH-Index: 19
Last. Joseph A. DiMasiH-Index: 26
view all 3 authors...
Previously published research by two of the authors found that returns on RD indications that RD new market strategies of major pharma firms; increased alliances with the emerging biotech sector; and, the increased attention focused on the pharmaceutical industry in the political arena. Nevertheless, analysis of new drugs entering the market from 1990-1994 resulted in findings similar to the earlier researchopharmaceutical R&D is characterized by a highly skewed distribution of returns and a mea...
16 Citations
#1Henry G GrabowskiH-Index: 39
#2John M VernonH-Index: 19
3 Citations
#1Henry G Grabowski (Duke University)H-Index: 39
#2John M Vernon (Duke University)H-Index: 19
Since the late 1970s, pharmaceutical R&D has grown at a rapid rate relative to sales and other variables. In this paper, we examine the determinants of pharmaceutical R&D using a pooled data sample of 11 major drug firms over the period 1974 to 1994. We find that expected returns and cash flows are important explanatory variables of firm research intensities during this period. This is consistent with our results for an earlier sample period characterized by very different growth patterns on R&D...
95 CitationsSource
Effective patent life is lost in pharmaceuticals because of the lengthy time periods required for clinical trials and regulatory approval. A 1984 US law restores some of this lost patent time, while also facilitating generic competition when patents expire. This paper examines this law and the effects of other policy developments on market exclusivity times in pharmaceuticals. It also performs simulation analyses on how proposed legislative reforms would impact on future new drug introductions.
61 CitationsSource
Objective: This report updates our earlier work on the returns to pharmaceutical research and development (R&D) in the US (1980 to 1984), which showed that the returns distributions are highly skewed. It evaluates a more recent cohort of new drug introductions in the US (1988 to 1992) and examines how the returns distribution is emerging for drugs with life cycles concentrated in the 1990s versus the 1980s.
45 CitationsSource
#1Henry G Grabowski (Duke University)H-Index: 39
#2John M Vernon (Duke University)H-Index: 19
The 1984 Drug Price Competition and Patent Term Restoration Act (the Waxman-Hatch Act) is unique in many ways. This Law was the first change in U.S. patent terms since 1861. It simultaneously lowered the barrier to entry for generic drug firms and increased patent terms for new drugs delayed by FDA regulation. In this paper, we analyze the Act has performed in practice, determining whether the Law has resulted in cheaper and better drugs.
22 CitationsSource
#1Henry G Grabowski (Duke University)H-Index: 39
#2John M Vernon (Duke University)H-Index: 19
The 1984 Waxman-Hatch Act had two main objectives. Title I was designed to promote price competition by establishing an abbreviated new drug application (ANDA) process for generic market entry. Title II was designed to encourage drug innovation by restoring some of the patent life lost during the lengthy FDA regulatory process. In this paper, we consider whether these twin objectives have been realised during the first decade of the Act’s existence.
112 CitationsSource
#1Joseph A. DiMasi (Tufts Center for the Study of Drug Development)H-Index: 26
#2Henry G Grabowski (Tufts Center for the Study of Drug Development)H-Index: 39
Last. John M Vernon (Duke University)H-Index: 19
view all 3 authors...
This study examines the relationships between firm size, R&D costs and output in the pharmaceutical industry. Project-level data from a survey of 12 US-owned pharmaceutical firms on drug development costs, development phase lengths and failure rates are used to determine estimates of the R&D cost of new drug development by firm size. Firms in the sample are grouped into three size categories, according to their pharmaceutical sales at the beginning of the study period. The R&D cost per new drug ...
59 CitationsSource
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