Returns on R&D for 1990s New Drug Introductions

Previously published research by two of the authors found that returns on research and development (R&D) for drugs introduced into the market in the 1970s and 1980s were highly skewed and that the top decile of the new drugs accounted for close to half the overall market value. These findings provide support for a model of intensive R&D competition by pharmaceutical firms to gain economic advantage through product innovation and differentiation.