R&D policy, agency costs and innovation in personalized medicine
AbstractThe Orphan Drug Act (ODA) was designed to spur the development of drugs for rare diseases. In principle, its design also incentivizes pharmaceutical firms to develop drugs for "rare" subdivisions of more prevalent diseases. I find that in response to this incentive, firms develop drugs for ODA-qualifying subdivisions of non-rare diseases. The impact in these tailored drug markets represents half of the total R&D response to the ODA. I also find that 10-percent of the innovation in subdivided disease drugs induced by the ODA would have been conducted without the policy. While modest in size, this inefficiency suggests that agency problems should be considered when designing innovation policy.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Health Economics.
Volume (Year): 28 (2009)
Issue (Month): 5 (September)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/505560
Pharmaceutical innovation Technological change Health policy;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Dubois, Pierre & de Mouzon, Olivier & Scott Morton, Fiona & Seabright, Paul, 2011.
"Market Size and Pharmaceutical Innovation,"
IDEI Working Papers
670, Institut d'Économie Industrielle (IDEI), Toulouse.
- Dubois, Pierre & de Mouzon, Olivier & Scott Morton, Fiona & Seabright, Paul, 2011. "Market Size and Pharmaceutical Innovation," TSE Working Papers 11-232, Toulouse School of Economics (TSE).
- de Mouzon, Oliver & Dubois, Pierre & Scott Morton, Fiona & Seabright, Paul, 2011. "Market Size and Pharmaceutical Innovation," CEPR Discussion Papers 8367, C.E.P.R. Discussion Papers.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wendy Shamier).
If references are entirely missing, you can add them using this form.