A Healthy Business: The evolution of the U.S. market for prescription drugs
Two central questions motivate my dissertation: First, how do variations in the political, social, or technological environment produce changes in the organization and orientation of pharmaceutical firms? Second, do these transformations alter either the kind or quality of new drugs that reach the market? To answer these, I study how the market originated in the 1940s and how the social, economic, and political pressures of the subsequent decades molded the firms and their orientation to produce both the market and medicine that we have today. The research combines interviews with pharmaceutical executives and archival research into corporate histories, along with previously unexamined accounts of the government's role in establishing a more robust industry in the 1940s, to motivate a series of hypotheses. These hypotheses are tested using time series and event history methods on organizational and financial variables for the population of pharmaceutical firms between 1935 and 2005. The findings help explain the ability of pharmaceutical firms to mitigate the consequence of environmental changes and to reproduce their market, and their profits, despite the repeated intervention of powerful actors.