Technological appropriability and demand preferences: the case of the pharmaceutical industry

This paper develops a history-friendly model for the pharmaceutical industry, with replications of features specific to the Brazilian market. The goal was to demonstrate the relevance of demand on the economic and technological progress in industries with high technological development, as pointed out by Nelson (2013). In short, the findings highlight the importance of considering the demand heterogeneity in evolutionary models and are conclusive regarding this objective. Significant changes in the market, financial and technological results for industrial firms were achieved with changes to the parameterization of consumers.

Keywords:
Pharmaceutical industry; Evolutionary model; Heterogeneity of demand; Innovation; Generic drugs