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Internal Deadlines, Drug Approvals, and Safety Problems

Author

Listed:
  • Lauren Cohen
  • Umit G. Gurun
  • Danielle Li

Abstract

Absent explicit quotas, incentives, reporting, or fiscal year-end motives, drug approvals around the world surge in December, at month-ends, and before respective major national holidays. Drugs approved before these informal deadlines are associated with significantly more adverse effects, including more hospitalizations, life-threatening incidents, and deaths—particularly, drugs most rushed through the approval process. These patterns are consistent with a model in which regulators rush to meet internal production benchmarks associated with salient calendar periods: this "desk-clearing" behavior results in more lax review, leading both to increased output and increased safety issues at particular—and predictable—periodicities over the year.

Suggested Citation

  • Lauren Cohen & Umit G. Gurun & Danielle Li, 2021. "Internal Deadlines, Drug Approvals, and Safety Problems," American Economic Review: Insights, American Economic Association, vol. 3(1), pages 67-82, March.
    • Handle: RePEc:aea:aerins:v:3:y:2021:i:1:p:67-82
    DOI: 10.1257/aeri.20200086
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    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics

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