Does Financing Have a Real Effect on Biotech Drug Development?
- Presenter:
Chair: Ernst R. Berndt Mon June 5, 2006 10:45-12:15 Room 335
In the 1990s the U.S. government instituted three policies that simplified the approval process and/or shortened the review time for drugs targeting life-threatening illnesses and have unmet medical needs, thereby increasing the expected profit of developing specific types of drugs. This paper examines whether the accelerated review (1991), fast track (1997), and priority review policies (1997) increased innovation by biotech and pharmaceutical firms in the targeted disease areas, as measured by pre-clinical research activity, human/clinical trials, and approved compounds. We also examine whether companies responded to the policies differently based on the availability of financing and their prior therapeutic focus. We use the PharmaProjects data base of drugs in development between 1989 and 2004, and apply a propensity score method to predict the types of compounds that would have received accelerated review, fast track, or priority review status prior to the implementation of the three policies. We predict the propensity to receive a special status based on attributes of the compound and the number of therapies on the market that are approved to treat a particular condition.
