ISSN 1745-9648 Growth and returns to new products and pack varieties: The case of UK pharmaceuticals Anna Rita Bennato Centre for Competition Policy, University of East Anglia Department of Accounting, Finance and Economics, Oxford Brookes University Farasat A.S. Bokhari Centre for Competition Policy and School of Economics, University of East Anglia Franco Mariuzzo Centre for Competition Policy and School of Economics, University of East Anglia CCP Working Paper 16-1 Abstract We use quarterly sales data from the UK pharmaceuticals market between 2003 and 2013 and estimate the impact of new introductions, i.e., new products and pack varieties within an anatomical therapy class on business unit growth. Using a dynamic lag adjustment growth model that accounts for endogeneity of new introductions, we find that a new product contributes to 18 per cent growth of the business unit while a new pack variety leads to 7 per cent growth for the business unit in the long run. Further, we find that there is significant variation in growth by size of firm and that the marginal effect of additional products on growth is larger for smaller business units. However, the marginal effect of pack varieties does not differ by firm size. Contact Details: Farasat Bokhari f.bokhari@uea.ac.uk The authors wish to acknowledge the contribution of the ESRC who supported their research through Centre for Competition Policy funding (ref: RES-578-28-0002).