Should we really worry about “launch delays” of new drugs in OECD countries?

Excerpt

In the last few years, the role of pharmaceutical price controls has been frequently questioned by economists on the grounds that they lower investments in research and development (R&D), due to reduced profitability [1]. A recent article by Danzon, Wang and Wang (hereafter, DWW [2]), although related to this general topic, somehow shifts the perspective, focusing on the effects of price regulation on strategic decisions to launch new chemical entities (NCEs) and finding that low prices in a therapeutic class are significantly related to launch delays of NCEs. DWW claim that these delays might be mainly a consequence of companies’ decisions to avoid price spillovers due to parallel trade and external referencing. After DWW, further “launch delay” literature appeared. Lanjow [3] and Kyle [4] reached similar conclusions to DWW, although using different data and techniques. …