Predicting Research and Development Costs for Pharmaceutical Projects : (Cost Reduction and Competitive Advantage Perspective)

In this paper, we present how to investigate the postulation for cost reduction and competitive advantage in industries similar to the pharmaceutical companies by analysing the research and development cost in those companies, where we predict this cost to be low if such postulations are applied. We use a discriminant analysis model with linear discriminant function to show how to predict pharmaceutical companies’ preferences of their cost of research and development. Our results and analysis predict that pharmaceutical companies will prefer high research and development cost for the multiple areas of new drugs and diseases rather than low cost, and we propose the choices to be more obvious in the new areas of drugs production and new diseases. We recommend future research to empirically investigate our results