Abstract:
INNOVATION in the U.S. ethical drug industry in recent years has been
characterized by a number of adverse developments. In particular, there has
been a sharp decline in the rate of new product introductions and the incentive
for engaging in research and development (R & D) activity has been
negatively influenced by rapid increases in the costs and risks of developing
new products. While there is little debate about the existence of these adverse
trends, there is considerable controversy about the factors producing
them.
Briefly, we list below five hypotheses that have been discussed as explanations
for the declining rate of innovation
