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Understanding the Rewards of Successful Drug Development — Thinking Inside the Box

List of authors.
  • Dhruv Khullar, M.D., M.P.P.,
  • Jennifer A. Ohn, M.P.H.,
  • Mark Trusheim, M.S.,
  • and Peter B. Bach, M.D., M.A.P.P.

Risks and rewards change during the life cycle of a drug. In the innovation period, drug companies invest in developing new products but cannot sell them. Newly approved drugs initially have exclusivity and enter the monopoly period, which is followed by the competitive period, when branded drugs compete with generics. The influence of policies on financial incentives in each period is described.

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Funding and Disclosures

Disclosure forms provided by the authors are available with the full text of this article at NEJM.org.

Author Affiliations

From the Department of Healthcare Policy and Research and the Department of Medicine, Weill Cornell Medicine (D.K.), and the Center for Health Policy and Outcomes, Memorial Sloan Kettering Cancer Center (J.A.O., P.B.B.) — both in New York; and the Sloan School of Management, Massachusetts Institute of Technology, Cambridge (M.T.).

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