Kyle, M. (2006). \"The Role

Kyle, M. (2006). "The role of firm characteristics in pharmaceutical product launches." The Rand Journal of Economics (37) 3, pp. 602-18.

The goal of this study was to determine the role that pharmaceutical company set up and market situations had on the release of new pharmaceutical companies. Specific components that the author looked at included market saturation with existing products in relation to the development and release of new products, and the country where the pharmaceutical company has its headquarters.

The time period examined in this study began in 1980 and continued through 2005, shortly before the article was submitted for publication. The quarter-century of data that the author compiled, along with her attempts to collect current information, resulted in accurate and reliable conclusions that are still entirely relevant. This data was collected from a variety of sources, including other journal articles, pharmaceutical company data (largely a matter of public record, and also reported in many other articles). The journal articles consulted for this study had a wide range of topics, from pricing patterns and fluctuations in the pharmaceutical industry to the ethics of drugs development and even the effects of brand loyalty on pharmaceutical consumers.

As with the broad time period covered in the study, this range of information provides a broad picture of the market and firm characteristic effects on pharmaceutical development and new product releases. The many angles from which the author of the study viewed the topic of new drug releases ensures as much as possible that no causes of differentiation were overlooked. Also, the number of sources consulted heightens the reliability of the information and conclusions.

The main findings of this article determined that while both market situations and firm characteristics are important in determining when pharmaceutical companies will develop and release new drugs, the interaction between these two primary forces is fundamental in this determination. Specifically, pharmaceutical companies are much more likely to launch products in new markets that more closely resemble the situations in their home markets. This is even more true when the markets are geographically and politically foreign, and not simply based around a different type of drug. Also, pharmaceutical companies are more likely to enter into competition with incumbent product producers that are foreign-based than with domestic competitors.