Learning From Failure and Learning from Success in the Pharmaceutical and Biotech Industry

Garzon-Vico, Antonio

doi:10.5465/ambpp.2012.14594abstract

Cited by 2 publications

(1 citation statement)

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“…The database catalogues drug development events since the 1950s, drawing from multiple sources including the FDA approval database, company filings with the Securities Exchange Commission (SEC), conference calls, press releases, news articles, medical conferences, direct communication 10 Prior studies have shown how firms learn from their industry rivals' successes and failures (Madsen and Desai, 2010;Baum and Dahlin, 2007;Kim and Miner, 2007;Ingram andBaum 1997, Haunschild andSullivan, 2002;Magazzini et al, 2012;Garzon-Vico, 2012). More recently, Bustamante and Fresard (2017) show that firms in imperfect information environments use their peers' investments to update their own estimations about their fundamentals.…”

Section: Data Sourcesmentioning

confidence: 99%

Enhanced Information Disclosure and Drug Development: Evidence from Mandatory Reporting of Clinical Trials

Oh¹,

Moon²,

Lee³

2020

Preprint

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Using Section 801 of the Food and Drug Administration Amendments Act of 2007 (FDAAA) that requires drug developers to disclose clinical trial plans and detailed study results publicly, we provide novel evidence for the effect of information disclosure on drug development. We find suspensions increase significantly in industry-sponsored clinical trials after the FDAAA. This effect has a causal interpretation based on a difference-indifferences analysis that exploits the disclosure requirement imposed by the International Committee of Medical Journal Editors (ICMJE) before the FDAAA. Further evidence supports peer learning as a mechanism for the increased suspensions after the FDAAA. Finally, we analyze the social welfare implications of enhanced information disclosure; while the FDAAA helps improve drug quality, it leads to more suspensions of potential new drugs that could have reduced mortality and morbidity.

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