Research & Publications Office to host seminar on Valuing Pharmaceutical Drug Innovations
The talk will be delivered by Prof. Gaurab Aryal, Boston University
30 December, 2025, Bangalore: The Office of Research and Publications (R&P) at IIMB will host a research seminar on ‘Valuing Pharmaceutical Drug Innovations’ by Prof. Gaurab Aryal, Economics area, Boston University, at 10:00 AM on January 8, 2026, in Classroom P-22.
This seminar will propose a novel methodology to estimate the market value of pharmaceutical drugs. Combining an event study approach with a discounted cash flow model, the research leverages stock market responses to drug development announcements to infer drug values across different stages of development.
The findings suggest that, on average, a successful pharmaceutical drug is valued at USD 1.62 billion, while its estimated value at the discovery stage is USD 64.3 million, with significant heterogeneity across major disease categories. Using these estimates, the study also derives average drug development costs at various stages. In addition, the seminar explores how these valuation estimates can inform policy design, including mechanisms such as drug buyouts and cost-sharing agreements aimed at supporting pharmaceutical innovation.
About the Speaker
Prof. Gaurab Aryal is an empirical industrial organization economist at Boston University. His research applies game theory and econometric methods to study markets and industries, both with and without informational frictions.
His current research spans the design of auctions for annuities and high-speed internet for schools, the measurement of market values of pharmaceutical drugs, merger analysis, and the examination of causal links between competition and productivity. His work contributes to advancing empirical methods in industrial organization and policy-relevant market design.
Click here: https://www.bu.edu/econ/profile/gaurab-aryal/
Research & Publications Office to host seminar on Valuing Pharmaceutical Drug Innovations
The talk will be delivered by Prof. Gaurab Aryal, Boston University
30 December, 2025, Bangalore: The Office of Research and Publications (R&P) at IIMB will host a research seminar on ‘Valuing Pharmaceutical Drug Innovations’ by Prof. Gaurab Aryal, Economics area, Boston University, at 10:00 AM on January 8, 2026, in Classroom P-22.
This seminar will propose a novel methodology to estimate the market value of pharmaceutical drugs. Combining an event study approach with a discounted cash flow model, the research leverages stock market responses to drug development announcements to infer drug values across different stages of development.
The findings suggest that, on average, a successful pharmaceutical drug is valued at USD 1.62 billion, while its estimated value at the discovery stage is USD 64.3 million, with significant heterogeneity across major disease categories. Using these estimates, the study also derives average drug development costs at various stages. In addition, the seminar explores how these valuation estimates can inform policy design, including mechanisms such as drug buyouts and cost-sharing agreements aimed at supporting pharmaceutical innovation.
About the Speaker
Prof. Gaurab Aryal is an empirical industrial organization economist at Boston University. His research applies game theory and econometric methods to study markets and industries, both with and without informational frictions.
His current research spans the design of auctions for annuities and high-speed internet for schools, the measurement of market values of pharmaceutical drugs, merger analysis, and the examination of causal links between competition and productivity. His work contributes to advancing empirical methods in industrial organization and policy-relevant market design.
Click here: https://www.bu.edu/econ/profile/gaurab-aryal/