Case Western Reserve University School of Law Scholarly Commons
Abstract
The number of innovative drugs reaching the market has decreased steadily during the last several years to a handful per year. At the same time, the amount of resources allocated by the pharmaceutical industries to promotion and marketing has increased at a faster pace than those allocated to research and development of new products. The paper presents the hypothesis that for the large corporations, the production of me-too drugs is more profitable than to invest in research and development of innovative products. Gaining a market share of me-too drugs requires large investments in promotion and marketing, one result of which is a division of labor among pharmaceutical firms. Because small firms lack the large resources needed for promotion and marketing, they carry out an increasing share of the research and development and sell the patents to the large corporations
