Abstract
Do pharmaceutical firms lobby the FDA to get their drugs approved as fast as possible or to treat as many diseases as possible? We argue that the non-market outcome a pharmaceutical firm tries to achieve through its lobbying efforts (speed or scope) is contingent on its drug development strategy, which is determined by the drug’s IP protection. When firms have strong IP protection their drug development strategy is aimed at maximizing drug functionality, so these firms will lobby for their drugs to be approved to treat as many diseases as possible. When firms have weak IP protection their strategy will focus on accelerating drug development, so these firms will lobby to shorten revision time. We test our hypotheses on 540 new drug applications to the FDA from 1998 to 2015 and find empirical support for our theory.
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