The productivity of research effort in the US pharmaceutical industry: a statistical approach

Abstract

The relationship between the organizational size and the research productivity of major US pharmaceutical firms was examined. The measure of organizational size was the research budget in dollars, and the measure of research production was the number of drugs introduced during hte 1960's judged be “important therapeutic advances” by a Food and Drug Administration study. Productivity, as distinct from production, was defined as research production per unit of R&D money spent. The conclusions are that research production appears to increase linearly with research budget. There seems to be no linear relationship between productivity and size, but quadratic techniques do give some evidence fro economies of scale in productivity.