publication . Article . 1994

The Economic Side Effects of Dangerous Drug Announcements

Dranove, David; Olsen, Chris;
  • Published: 01 Jan 1994 Journal: The Journal of Law and Economics, volume 37, pages 323-348 (issn: 0022-2186, eissn: 1537-5285, Copyright policy)
  • Publisher: University of Chicago Press
Immediately prior to the passage of the 1962 Food and Drug Administration Amendments, there were a number of drugs recalled from markets worldwide. Announcements about the dangerous side effects of these drugs were associated with lower-share prices for their manufacturers and the industry as a whole. We perform several analyses to sort out alternative explanations for the observed declines. We find that dangerous drug announcements had no effect on the sales of other drugs and didn't affect the share values of European drug makers doing little business in the U.S. We also find that share-price reductions associated with recalls in the 1970s and 1980s were confi...
Medical Subject Headings: educationhealth care economics and organizations
free text keywords: Economics and Econometrics, Law, Shareholder, Drug administration, Drug, media_common.quotation_subject, media_common, Drug Company, Economics, Advertising, Marketing
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