The global entry of new pharmaceuticals: A joint investigation of launch window and price

Abstract

Research on the launch of new products in the international realm is scarce. The present paper is the first to document how launch window (the difference, in months, between the first worldwide launch and the subsequent launch in a specific country) and launch price are interrelated and how regulation influences both the launch window and launch price. The research context is the global (50 countries worldwide) launch of 58 new ethical drugs across 29 therapeutic areas. We show that the fastest launch occurs when the launch price is moderately high and the highest launch price occurs at a launch window of 85 months. We find that the health regulator acts strategically in that the extent to which it delays the launch of a new drug increases with the price of the new drug. We also find that overall, regulation increases the launch window, except for patent protection. Surprisingly, regulation does not directly impact launch price. The descriptive information on average launch window and launch price and the interconnection between launch window and launch price allow managers in ethical drug companies to make more informed decisions about international market entry. This study also provides public policy analysts with more quantitative evidence on launch window and launch price across a broad sample of countries and drug therapeutic categories.