How changes in drug-safety regulations affect the way drug and biotech companies invest in innovation. Health affairs (Project Hope) Reed, S. D., Califf, R. M., Schulman, K. A. 2006; 25 (5): 1309-17


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.

View details for DOI 10.1377/hlthaff.25.5.1309

View details for PubMedID 16966727