[Skip to Content]
[Skip to Content Landing]
January 3, 1996

Science and Innovation: The US Pharmaceutical Industry During the 1980s

Author Affiliations

Orphan Medical, Inc Minnetonka, Minn

JAMA. 1996;275(1):73-74. doi:10.1001/jama.1996.03530250077035

This article is only available in the PDF format. Download the PDF to view the article, as well as its associated figures and tables.


As with other industries, the driving force behind the pharmaceutical industry is economic. However, the economic influences affecting pharmaceutical companies differ markedly from those affecting other industries. Among the major differences are price controls imposed in some countries and threatened in others; the substitution of generic products for the innovator's product, once the original patent runs out; and the shrinking number of customers for drugs. Purchasing decisions are now being made primarily by formulary committees of hospitals, consortia, and managed care institutions.

This book, written by a professor of economics, focuses on economics, but none of the topics mentioned above is discussed in any depth. Rather, the author discusses the economics of drug discovery and, to a lesser degree, drug development. Precise economic models of drug discovery and development are presented.

Gambardella describes the transition of drug discovery during this century from random screening and trial-and-error methods to the more