Innovation incentives under transferable fast-track regulatory review
Under a 2007 U.S. law, the developer of a treatment for a neglected disease is rewarded with a fast-track voucher that can be sold to another developer. Similar fast-track vouchers are being offered by other agencies. We model how the existence of transferable, fast-track vouchers can impact innovation for both humanitarian and other products, and can create competition between otherwise unrelated pursuits. We consider the tradability of fast-track vouchers and map these to innovation race outcomes. Our analysis highlights areas for further exploration in policy settings as well as predictions for empirical analysis. © 2013 The Editorial Board of The Journal of Industrial Economics and John Wiley & Sons Ltd.
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