Patent disclosures and R&D competition in pharmaceuticals

The prominent role played by patents within the pharmaceutical domain is unquestionable. In this paper, we focus on a relatively neglected implication of patents: the effect of patent-induced information disclosure on the dynamics ofR&Dand market competition. The study builds upon the combination of two large datasets, linking the information about patents to firm-level data on R&D projects and their outcome. Two case studies in the fields of anti-inflammatory compounds and cancer research complement our analysis. We argue that patent disclosure induces R&D competition and shapes firms’ technological trajectories. In fact, we show that under conditions of uncertainty, patent disclosure can contribute to generate knowledge spillovers, promoting multiple parallel research efforts on plausible targets and stimulating private investment and competition.