Do Firms Underinvest in Long-Term Research? Evidence from Cancer Clinical Trials

• 成果类型: Article
• 署名作者: Budish, Eric; Roin, Benjamin N.; Williams, Heidi
• 署名单位: University of Chicago; Massachusetts Institute of Technology (MIT); Massachusetts Institute of Technology (MIT); National Bureau of Economic Research
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20131176
• 发表日期: 2015
• 页码: 2044-2085
• 关键词: SURROGATE END-POINTS; drug development; patent; INNOVATION; APPROVAL; survival; HEALTH; LIFE; INVESTMENT; AGENCY

摘要

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) clinical-trial endpoints, targeted R&D subsidies, and patent design. (JEL D92, G31, I11, L65, O31, O34)