How changes in drug-safety regulations affect the way drug and biotech companies invest in innovation.

Journal Article (Journal Article)

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.

Full Text

Duke Authors

Cited Authors

  • Reed, SD; Califf, RM; Schulman, KA

Published Date

  • September 2006

Published In

Volume / Issue

  • 25 / 5

Start / End Page

  • 1309 - 1317

PubMed ID

  • 16966727

Electronic International Standard Serial Number (EISSN)

  • 1544-5208

Digital Object Identifier (DOI)

  • 10.1377/hlthaff.25.5.1309


  • eng

Conference Location

  • United States