Pharmaceuticals inter‐country diffusion

This paper considers possible determinants of diffusion processes and exposes to test hypotheses on determinants of mean lags per country and numbers of new products launched in each country. For drugs launched before 1969 these mean lags and numbers of products appear primarily to have been determined by commercial forces. Drugs launched after 1969 do not exhibit such predictable diffusion patterns. Assessents of regulatory tightness in the eighteen markets studied provide impressive explanations for changes in mean lag times per country and numbers of products launched‐in each country. FDA critics appear justified in claiming that FDA regulations have caused a US drug lag.