Patricia M. Danzon and Sean Nicholson

in The Oxford Handbook of the Economics of the Biopharmaceutical Industry

Published in print April 2012 | ISBN: 9780199742998
Published online September 2012 | | DOI:

Series: Oxford Handbooks


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This article discusses the key characteristics of the biopharmaceutical industry. The biopharmaceutical industry is unusually research intensive. The US research-based biopharmaceutical industry invests about 15 percent of its sales in research and development (R&D), compared with about 4 percent for US industry in general. The R&D cost of bringing a new compound to market is estimated to be greater than $1 billion. This research intensity underlies many of the unique features of this industry. Two key policy issues are briefly considered: whether and how governments should support and regulate R&D with the goal of generating the optimal amount and types of R&D spending; and how government should regulate the market access, prices, and promotion of biopharmaceuticals. An overview of the structure and contents of this book is also provided.

Keywords: biopharmaceutical industry; R&D; regulation; spending; market access; prices; promotion

Article.  7663 words. 

Subjects: Economics ; Health, Education, and Welfare

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