Innovation Incentives and Competition

PORTAL researchers study how incentives in drug and medical device markets can be better aligned to promote meaningful innovation and ensure timely competition.

Innovation Incentives & Competition

Differential Legal Protections for Biologics vs Small-Molecule Drugs in the US

Wouters OJ, Vogel M, Feldman WB, Beall RF, Kesselheim AS, Tu SS | JAMA (2024)

The authors explore the validity of various justifications for the greater legal protections given to biologics over small-molecule drugs in the US. Across development times, clinical trial success rates, research and development costs, patent protection, market exclusivity periods, revenues, and treatment costs, the study found no evidence supporting differential treatment. The authors conclude that US law overly rewards the development of biologics relative to small-molecule drugs.

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Recent Work in Innovation Incentives & Competition

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Prescription Drugs Affected by an Expanded Rare Disease Carve-Out from Medicare Price Negotiation

Rome BN, Mooney H, Kesselheim AS - Journal of General Internal Medicine

  • Innovation Incentives and Competition
  • Price, Value, and Access
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Closing the Evidence Gap for Drugs in Children — Measures to Strengthen the Pediatric Research Equity Act

Liu ITT, Bourgeois F - New England Journal of Medicine

  • Innovation Incentives and Competition
  • Regulation and Clinical Evidence
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Anticompetitive Mergers — Pharmaceutical Buyouts as a Strategy for Maintaining Market Dominance

Tu SS, King J - New England Journal of Medicine

  • Innovation Incentives and Competition
Pharmaceutical “killer acquisitions,” in which incumbent firms buy out smaller competitors to shelve or delay their products, pose a threat to competition and innovation that current antitrust frameworks under the Hart-Scott-Rodino Act are poorly equipped to catch. The authors recommend coordinated legislative and regulatory reforms to better protect competition and patient interests, including lowering notification thresholds for concentrated industries, accounting for intangible assets like patents in merger valuations, and applying heightened scrutiny to acquisitions involving overlapping products.
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