R&D in the Pharmaceutical Industry: A World of Small Innovations
指出制药企业偏向小创新而非高风险大创新，原因在于需求对价格不敏感，小创新针对需求缺乏弹性的部分能获得更大回报，并探讨了营销策略和监管工具对研发激励的影响。
It is commonly argued that in recent years pharmaceutical companies have targeted their research and development (R&D) at small improvements of existing compounds instead of riskier drastic innovations. In this paper, we show that the bias in the pharmaceutical industry toward small innovations might be driven by the low sensitivity of the demand. In particular, small innovations get a proportionally larger reward because pharmaceutical firms target them at the inelastic segments of the demand. As a consequence, firms find it relatively more profitable to invest in small innovations. We also study the effect on R&D incentives of marketing strategies and regulatory instruments aimed at controlling pharmaceutical expenditure.