A note on disease burden and pharmaceutical R&D

Vijay Mohan and Munirul Nabin

Australian Economic Papers, 2023, vol. 62, issue 4, 633-649

Abstract: We examine the relationship between research and development (R&D) expenditures and the expected impact of diseases in a simple theoretical framework that allows for intellectual property rights (IPR) protection to be strong or weak. In our theoretical model, an agent forms an expectation of the impact of a disease using a publicly available statistic on the (population level) disease burden, such as disability‐adjusted life year. We show that a profit‐maximising firm will exert relatively more R&D effort on diseases with intermediate expected impacts. We also discuss how a weak IPR regime alters the pattern of R&D investment.

Date: 2023
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https://doi.org/10.1111/1467-8454.12313

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Persistent link: https://EconPapers.repec.org/RePEc:bla:ausecp:v:62:y:2023:i:4:p:633-649

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