سیاست تحقیق و توسعه ، هزینه های آژانس و نوآوری در پزشکی شخصی

The 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.

A widely held view is that market failures lead to inefficient allocation of R&D investments. If so, there is scope for the development of welfare-improving policies to alter firms’ R&D activities. When it is impractical to implement optimal corrective measures, incentive mechanisms are chosen from the set of available “second-best” policies. These policies are designed to stimulate private R&D investments; at the same time, they are thought to be associated with inefficiencies (Arrow, 1962, Lazear, 1996 and Hall, 2002). Despite its importance for innovation policy, little empirical work has been devoted to studying how specific policy mechanisms affect private innovation, or to identifying empirically the source and extent of inefficiencies related to the design of incentives. In this paper, I study these issues in the context of pharmaceutical innovation. The pharmaceutical industry has been one of the most innovative industries over the past half century, and one whose innovations embody substantial technological progress (Lichtenberg and Virabhak, 2002). Specifically, I study the private R&D investment response to incentives created by the Orphan Drug Act (ODA). Passed in 1983, the ODA established supply and revenue-side incentives to stimulate drug development for rare diseases, defined as diseases with prevalence less than 200,000 Americans. Passage of the ODA provides an ideal setting in which to test whether tools at the disposal of policy-makers are able to stimulate innovation in areas where private R&D is deemed inadequate.

This paper studies how innovation policy impacts private pharmaceutical innovation. Specifically, I examine the ODA, which created supply and demand-side incentives for the development of rare-disease drugs. While prior studies of the ODA have focused innovation in traditionally defined rare-disease drug markets, this study examines innovation in non-rare disease drugs. In theory, the policy's definition of a rare disease (any disease with US prevalence below 200,000) gives firms an incentive to carve out new ODA-qualifying diseases from patient populations with traditionally defined diseases. Evidence reported in this paper bears out these predictions. I find robust evidence that the ODA encourages firms to develop drugs for ODA-qualifying subdivisions of non-rare diseases. Further, the impact on drugs that treat ODA-qualifying subdivisions of non-rare diseases is equal in magnitude to the impact measured on traditional rare-disease drug development estimated in earlier work (Yin, 2008). Commonly observed subdivisions in the raw clinical trials data include subpopulations that are refractory to existing therapies, have a severe or progressed form of a disease, or have key co-morbidities or other characteristics that differentiate patients according to their risk–benefit profile of drug utilization. To the extent that the observed differentiation leads to more tailored and personalized drug therapies (i.e. to a lower average “distance” between patients and the nearest drug on the disease circle), subsidizing drug innovation for small disease populations may increase average clinical benefits experienced by patients. Indeed, the development of personalized drugs that treat narrowly defined subsets of patients within broadly defined disease populations is widely thought to be a promising direction for future drug research (Haffner et al., 2002, Collins et al., 2003 and Couzin, 2005).