Publications
Publications
- 2023
Market Exclusivity and Innovation: Evidence From Antibiotics
By: Edward Kong and Olivia Zhao
Abstract
The US incentivizes drug innovation via patents as well as market exclusivity periods awarded by the US Food and Drug Administration. We estimate the causal effects of extending market exclusivity for an important drug class: antibiotics. Using a difference-in-differences approach, we show that the Generating Antibiotic Incentives Now (GAIN) Act – a policy change that granted 5 additional years of exclusivity for antibiotics but not antivirals or vaccines – led to a significant increase in phase 3 clinical trials. We also find evidence that the GAIN Act generated novel innovation, including larger effects among drugs with more novel patents.
Keywords
Health Testing and Trials; Innovation and Invention; Motivation and Incentives; Government Administration; Government Legislation; Pharmaceutical Industry; United States
Citation
Kong, Edward, and Olivia Zhao. "Market Exclusivity and Innovation: Evidence From Antibiotics." Working Paper, December 2023.