How changes in drug-safety regulations affect the way drug and biotech companies invest in innovation.
Changes in the economics of product development resulting from heightened safety regulations could have a sizable negative impact on drug and biotechnology companies' decisions about investing in innovation. We developed a model to compare the potential economic effects of pre- and postmarketing strategies to identify safety problems with new drugs. Although expanding Phase III clinical testing and postmarketing safety surveillance are not perfect substitutes, our findings suggest that even a large increase in funding for the latter will have a relatively small adverse impact on investment decisions by drug companies and venture capital firms, compared with the former.
Reed
Shelby D
SD
Duke University School of Medicine, Center for Clinical and Genetic Economics, Durham, North Carolina, USA.
Califf
Robert M
RM
Schulman
Kevin A
KA
D001709:Biotechnology / Q000191:economics* / Q000331:legislation & jurisprudence; D017326:Clinical Trials, Phase III as Topic; D004059:Diffusion of Innovation; D004345:Drug Industry / Q000191:economics* / Q000331:legislation & jurisprudence; D033161:Government Regulation; D006801:Humans; D007449:Investments; D012449:Safety / Q000331:legislation & jurisprudence; D014481:United States; D014486:United States Food and Drug Administration