Innovation Incentives Under Transferable Fast‐Track Regulatory Review

28 Pages Posted: 23 Oct 2013

See all articles by Joshua S. Gans

Joshua S. Gans

University of Toronto - Rotman School of Management; NBER

David B. Ridley

Duke University - Fuqua School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: September 2013

Abstract

Under a 2007 U.S. law, the developer of a treatment for a neglected disease is rewarded with a fast‐track voucher that can be sold to another developer. Similar fast‐track vouchers are being offered by other agencies. We model how the existence of transferable, fast‐track vouchers can impact innovation for both humanitarian and other products, and can create competition between otherwise unrelated pursuits. We consider the tradability of fast‐track vouchers and map these to innovation race outcomes. Our analysis highlights areas for further exploration in policy settings as well as predictions for empirical analysis.

Suggested Citation

Gans, Joshua S. and Ridley, David B., Innovation Incentives Under Transferable Fast‐Track Regulatory Review (September 2013). The Journal of Industrial Economics, Vol. 61, Issue 3, pp. 789-816, 2013. Available at SSRN: https://ssrn.com/abstract=2344003 or http://dx.doi.org/10.1111/joie.12026

Joshua S. Gans (Contact Author)

University of Toronto - Rotman School of Management ( email )

Canada

HOME PAGE: http://www.joshuagans.com

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

David B. Ridley

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

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