Browsing by Author "Vernon, JM"

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    Estimating the Effects of Regulation on Innovation: An International Comparative Analysis of the Pharmaceutical Industry
    (1978) Grabowski, HG; Vernon, JM; Thomas, LG
    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.`
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    Returns to R&D on new drug introductions in the 1980s.
    (J Health Econ, 1994-12) Grabowski, HG; Vernon, JM
    This study finds that the mean IRR for 1980-84 U.S. new drug introductions is 11.1%, and the mean NPV is 22 million (1990 dollars). The distribution of returns is highly skewed. The results are robust to plausible changes in the baseline assumptions. Our work is also compared with a 1993 study by the OTA. Despite some important differences in assumptions, both studies imply that returns for the average NCE are within one percentage point of the industry's cost of capital. This is much less than what is typically observed in analyses based on accounting data.
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    The Economics of the Network-Affiliate Relationship
    (American Economic Review, 1975-12) Graham, DA; Vernon, JM