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Trials, tricks and transparency: How disclosure rules affect clinical knowledge

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  • Dahm, Matthias
  • González, Paula
  • Porteiro, Nicolás

Abstract

Scandals of selective reporting of clinical trial results by pharmaceutical firms have underlined the need for more transparency in clinical trials. We provide a theoretical framework which reproduces incentives for selective reporting and yields three key implications concerning regulation. First, a compulsory clinical trial registry complemented through a voluntary clinical trial results database can implement full transparency (the existence of all trials as well as their results is known). Second, full transparency comes at a price. It has a deterrence effect on the incentives to conduct clinical trials, as it reduces the firms' gains from trials. Third, in principle, a voluntary clinical trial results database without a compulsory registry is a superior regulatory tool; but we provide some qualified support for additional compulsory registries when medical decision-makers cannot anticipate correctly the drug companies' decisions whether to conduct trials.

Suggested Citation

  • Dahm, Matthias & González, Paula & Porteiro, Nicolás, 2009. "Trials, tricks and transparency: How disclosure rules affect clinical knowledge," Journal of Health Economics, Elsevier, vol. 28(6), pages 1141-1153, December.
  • Handle: RePEc:eee:jhecon:v:28:y:2009:i:6:p:1141-1153
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    References listed on IDEAS

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    1. Matthias Dahm & Nicolás Porteiro, 2008. "Informational lobbying under the shadow of political pressure," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(4), pages 531-559, May.
    2. Lewis Tracy R. & Reichman Jerome H. & So Anthony D., 2007. "The Case for Public Funding and Public Oversight of Clinical Trials," The Economists' Voice, De Gruyter, vol. 4(1), pages 1-4, January.
    3. Paul Milgrom & John Roberts, 1986. "Relying on the Information of Interested Parties," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 18-32, Spring.
    4. Brekke, Kurt R. & Kuhn, Michael, 2006. "Direct to consumer advertising in pharmaceutical markets," Journal of Health Economics, Elsevier, vol. 25(1), pages 102-130, January.
    5. Bennedsen, Morten & Feldmann, Sven E., 2006. "Informational lobbying and political contributions," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 631-656, May.
    6. Pierre Azoulay, 2002. "Do Pharmaceutical Sales Respond to Scientific Evidence?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(4), pages 551-594, December.
    7. Richard Schmalensee, 1976. "A Model of Promotional Competition in Oligopoly," Review of Economic Studies, Oxford University Press, vol. 43(3), pages 493-507.
    8. Paul R. Milgrom, 1981. "Good News and Bad News: Representation Theorems and Applications," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 380-391, Autumn.
    9. Grabowski, Henry G. & Vernon, John M., 1994. "Returns to R&D on new drug introductions in the 1980s," Journal of Health Economics, Elsevier, vol. 13(4), pages 383-406.
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    Cited by:

    1. Henry, Emeric & Ottaviani, Marco, 2017. "Research and the Approval Process: The Organization of Persuasion," CEPR Discussion Papers 11939, C.E.P.R. Discussion Papers.
    2. Di Tillio, Alfredo & Ottaviani, Marco & Sørensen, Peter Norman, 2016. "Persuasion Bias in Science: Can Economics Help?," CEPR Discussion Papers 11343, C.E.P.R. Discussion Papers.
    3. Simone Ghislandi & Michael Kuhn, 2016. "Asymmetric information in the regulation of the access to markets," Department of Economics Working Papers wuwp219, Vienna University of Economics and Business, Department of Economics.
    4. Daniel Stone, 2011. "A signal-jamming model of persuasion: interest group funded policy research," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 37(3), pages 397-424, September.

    More about this item

    Keywords

    Pharmaceutical firms Strategic information transmission Incentives Clinical trials Registries Results databases Scientific knowledge;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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