Do pharmaceutical firms respond to the actions of their competitors in research and development, and if so, how much? Answering this question has implications for policies aimed at incentivizing drug development, such as greater exclusivity protections and a faster Food and Drug Administration approval process. Although such policies lead to quicker realization of profits and/or more time to earn profits, they also intensify competition, thereby reducing per-firm profits. Which effect dominates depends on the degree of competition. To this end, I estimate a dynamic investment model using Phase 3 data. Solving the new equilibrium, I find that even though an expedited process and longer periods of market exclusivity increase competitive intensity, it could prompt increased entry into Phase 3, thereby encouraging innovation.

中文翻译：

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医药行业的战略研发投资决策

制药公司是否响应竞争对手在研发中的行为？如果是，那么多少？回答这个问题对旨在激励药物开发的政策有影响，例如更大的排他性保护和更快的食品药品监督管理局批准程序。尽管这样的政策可以更快地实现利润和/或获得利润的更多时间，但它们也会加剧竞争，从而降低企业的利润。哪种效果占主导地位取决于竞争程度。为此，我使用第3阶段数据估算了动态投资模型。解决新的平衡问题，我发现，即使加快了流程并延长了市场独占时间，竞争强度也会提高，但它可能会促使进入第三阶段的人数增加，从而鼓励创新。