Do firms underinvest in long-term research? Evidence from cancer clinical trials

The American Economic Review
Eric BudishHeidi Williams

Abstract

We investigate whether private research investments are distorted away from long-term projects. Our theoretical model highlights two potential sources of this distortion: short-termism and the fixed patent term. Our empirical context is cancer research, where clinical trials - and hence, project durations - are shorter for late-stage cancer treatments relative to early-stage treatments or cancer prevention. Using newly constructed data, we document several sources of evidence that together show private research investments are distorted away from long-term projects. The value of life-years at stake appears large. We analyze three potential policy responses: surrogate (non-mortality) clinicaltrial endpoints, targeted R&D subsidies, and patent design.

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Citations

Mar 22, 2016·CNS Oncology·Victor A Levin
Aug 26, 2014·Annual Review of Pharmacology and Toxicology·Sara Parker-LueGreg Koski
May 31, 2016·The American Economic Review·Eric BudishHeidi L Williams
Nov 9, 2017·Australian Health Review : a Publication of the Australian Hospital Association·Deborah GleesonHazel Moir
Nov 7, 2017·Annual Review of Economics·Heidi L Williams
Aug 25, 2020·Nutrition and Cancer·Diorge Jônatas MarmittMárcia Inês Goettert
Apr 13, 2017·The New England Journal of Medicine·Amitabh Chandra, Rachel E Sachs
Oct 21, 2020·Health Economics·Anna ChorniyMichael Maloney
Mar 15, 2018·Neuro-oncology·Victor A Levin
Jun 4, 2020·Proceedings of the National Academy of Sciences of the United States of America·Jérôme AddaMarco Ottaviani
Jul 31, 2018·Journal of Oncology·Ricardo Eccard da SilvaMaria Rita Carvalho Garbi Novaes
Jul 19, 2017·CNS Oncology·Victor A LevinJames M Gallo
May 4, 2016·Cancer Prevention Research·William N Hait, Peter F Lebowitz
Aug 29, 2021·Value in Health : the Journal of the International Society for Pharmacoeconomics and Outcomes Research·Reed F BeallEldon Spackman
Aug 31, 2021·Wirtschaftsdienst·Andreas Eckert, Wolfgang Maennig

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