Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Law
Fda New Drug Review Times, Prescription Drug User Fee Acts, And R&D Spending, John Vernon
Fda New Drug Review Times, Prescription Drug User Fee Acts, And R&D Spending, John Vernon
John Vernon
FDA approval times have declined significantly since the enactment of the Prescription Drug User Fee Act (PDUFA) in 1992. As a result, present value expected returns to pharmaceutical R&D have likely increased. In the current paper we employ a unique survey dataset, one which includes data from 1990 to 1999 on firm-level pharmaceutical R&D expenditures for 7 large, U.S.-based drug companies. We estimate the effect FDA approval times have on firm R&D spending. Controlling for other factors such as pharmaceutical profitability and cash flows, we estimate that a 10 percent decrease (increase) in FDA approval times leads to an increase …