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Can the separation of marketing authorization from manufacturing authorization stimulate pharmaceutical innovation? Evidence from China's pharmaceutical industry reform

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  • Wan, Paijie
  • He, Feng
  • Zhang, Hongjie

Abstract

Using data from A-share pharmaceutical manufacturing listed companies between 2011 and 2021, this paper constructs a difference in differences (DID) model to systematically analyze the impact of China's Marketing Authorization Holder (MAH) system pilot policy on pharmaceutical enterprise innovation. Our findings indicate that implementing the MAH system can significantly stimulate innovation in pharmaceutical enterprises, both in terms of input and output. Additionally, local intellectual property protection positively moderates the incentive effect of MAH system on pharmaceutical innovation. The results of our heterogeneity analysis further demonstrate that the pilot policy of the MAH system exerts a stronger incentive effect on the innovation behavior of non-state-owned enterprises and enterprises in the growth and mature stage. Moreover, we provide evidence for the long-term impact of MAH system on innovation within pharmaceutical companies.

Suggested Citation

  • Wan, Paijie & He, Feng & Zhang, Hongjie, 2024. "Can the separation of marketing authorization from manufacturing authorization stimulate pharmaceutical innovation? Evidence from China's pharmaceutical industry reform," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 734-748.
    • Handle: RePEc:eee:ecanpo:v:83:y:2024:i:c:p:734-748
    DOI: 10.1016/j.eap.2024.07.020
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    More about this item

    Keywords

    Drug marketing authorization holder system; Pharmaceutical enterprise innovation; Intellectual property protection;
    All these keywords.

    JEL classification:

    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General

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