Description:

Speaker: Sungjin Kim

Title: Innovation or Suppression? Strategic Control in Pharmaceutical R&D

Abstract:  Partnerships in pharmaceutical innovation can accelerate a compound to market—or quietly bury a future rival. We study how such strategic partnership decisions are shaped by cannibalization risk and by firm and drug characteristics, and how they affect innovation outcomes. We develop a theoretical auction model in which an incumbent’s willingness to support or suppress a project reflects both expected development support and the strategic value of suppressing a close substitute. We summarize the key drivers in a support-intent index that forecasts ex ante whether the partnered project is likely to launch or stall. Counterfactuals quantify the welfare trade-off: restrictions that prevent suppressive partnerships raise average success probabilities but reduce investment payments, potentially deterring socially valuable orphan and essential medicines. Our results provide a screening tool against strategic suppression and offer guidance for innovation and competition policy.