Drug Life Cycles in the Pharmaceutical Industry, Empirical Detection and Consequences for R&D Profitability


Bauer, Hans H. ; Fischer, Marc


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URL: https://ub-madoc.bib.uni-mannheim.de/13541
URN: urn:nbn:de:bsz:180-madoc-135413
Document Type: Working paper
Year of publication: 1999
The title of a journal, publication series: Reihe: Wissenschaftliche Arbeitspapiere / Institut für Marktorientierte Unternehmensführung
Volume: W019
Place of publication: Mannheim
Publishing house: Inst. für Marktorientierte Unternehmensführung, Univ. Mannheim
ISBN: 3-89333-159-X , 978-3-89333-159-8
Edition: [Nachdr. der Ausg.] Mannheim, 1998
Publication language: English
Institution: Business School > ABWL u. Marketing II (Bauer Em)
Subject: 330 Economics
Abstract: Reliable forecasts of brand sales are fundamental to a value based evaluation of R&D projects in the pharmaceutical industry. The paper describes a cross sectional and time series analysis of sales data over one decade in four major segments of the market for cardiovascular drugs. The seven leading countries except for Japan are covered in the study. We estimate over 200 product life cycles using a very flexible mathematical model to account for a variety of PLC shapes. Life cycles are then clustered on the basis of estimated regression coefficients. As a result this analysis leads to the detection of an international product life cycle classification. This typology gives useful insight into the success and market determinants in the segments under investigation. Moreover, it turns out that the order of entry is not only crucial to achieve a certain market share level but also to the shape of the drug life cycle. The paper provides first findings on this subject. Consequences for the economic evaluation of innovative products are drawn according to their prototypical life cycle. In this context we conduct a simulation study to show the impact of the PLC shape on the net present value. Management implications on effective R&D strategies in the light of cost containment efforts are shown at the end.
Additional information: Der Titel wurde anlässlich der Gründung des IMU aus einer Schriftenreihe des Instituts für Marketing an der Universität Mannheim übernommen.

Dieser Eintrag ist Teil der Universitätsbibliographie.

Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Bauer, Hans H. ; Fischer, Marc (1999) Drug Life Cycles in the Pharmaceutical Industry, Empirical Detection and Consequences for R&D Profitability. Open Access Reihe: Wissenschaftliche Arbeitspapiere / Institut für Marktorientierte Unternehmensführung Mannheim W019 [Working paper]
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