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Publications
Publications
  • 2022
  • Working Paper

Regulatory Incentives for Innovation: The FDA's Breakthrough Therapy Designation

By: Amitabh Chandra, Jennifer Kao, Kathleen Miller and Ariel D. Stern
  • Format:Print
  • | Language:English
  • | Pages:88
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Abstract

Regulators of new products confront a tradeoff between speeding a new product to market and collecting additional product quality information. The FDA’s Breakthrough Therapy Designation (BTD) provides an opportunity to understand if a regulator can use new policy to innovate around this tradeoff—i.e., whether it improved regulator productivity by allowing products to come to market more quickly without compromising quality. We find that the BTD program shortened clinical development times by 23 percent and did not impact the ex post safety profile of drugs with the designation. In exploring mechanisms, we find that the BTD program had the greatest impact on less experienced firms and was associated with reduced BTD clinical trial design complexity. The results suggest that targeted regulatory innovation can shorten R&D periods without compromising the quality of new products.

Keywords

Research and Development; Governing Rules, Regulations, and Reforms; Product Development

Citation

Chandra, Amitabh, Jennifer Kao, Kathleen Miller, and Ariel D. Stern. "Regulatory Incentives for Innovation: The FDA's Breakthrough Therapy Designation." NBER Working Paper Series, No. 30712, December 2022.
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About The Author

Amitabh Chandra

Technology and Operations Management
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  • Expert Patients’ Use of Avoidable Health Care By: Amitabh Chandra, Pragya Kakani and Simone Matecna
  • The Health Costs of Cost Sharing By: Amitabh Chandra, Evan Flack and Ziad Obermeyer
  • Medicare Part D Protected-Class Policy Is Associated with Lower Drug Rebates By: Pragya Kakani, Michael Anne Kyle, Amitabh Chandra and Luca Maini
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