We argue firms implementing political activities face a fundamental trade-off between the content and the speed of public officials’ decisions. We show evidence of this trade-off looking at FDA drug approvals: lobbying for broader drugs leads to longer revisions, whereas lobbying to speed up the review process leads to narrower drugs. How do firms respond to this trade-off? We argue firms’ lobbying strategies depend upon the level of IP protection behind their drugs. We predict that firms with high levels of IP protection will lobby for drug scope, whereas firms with low levels of IP protection will lobby for revision speed. We find support for our theory in a sample of 540 new drug applications to the FDA from 1998 to 2015.
