Abstract
This paper examines the impact of a drug withdrawal on shareholders of firms and their direct competitors. It finds shareholders suffer significant wealth losses when there are reports of adverse drug reactions and when the firm actually withdraws a drug from the market. Additionally, shareholder wealth losses are inversely related to the firm's market capitalization. Firms that withdraw drugs during advanced clinical investigations experience greater wealth loss than drugs withdrawn during post-marketing surveillance. Wealth losses are lower if many firms withdraw the same type of drug and if that drug has available substitutes.
| Original language | English |
|---|---|
| Pages (from-to) | 21-41 |
| Number of pages | 21 |
| Journal | Financial Management |
| Volume | 31 |
| Issue number | 3 |
| State | Published - 2002 |
ASJC Scopus Subject Areas
- Accounting
- Finance
- Economics and Econometrics
Keywords
- Studies
- Impact analysis
- Losses
- Pharmaceuticals
- Competitions
- Statistical analysis
- Stock prices
- Marketing
- stockholders
- Product recalls
- Drug withdrawal