Working Paper: NBER ID: w13862
Authors: Jay Bhattacharya; Mikko Packalen
Abstract: This paper examines whether the composition of medical research responds to changes in disease incidence and research opportunities. The paper also provides new evidence on induced pharmaceutical innovation. In both cases we use the change in the demographic structure of the market (measured by age structure and obesity prevalence) to test the induced innovation hypothesis. Technological opportunity is calculated from estimates of structural productivity parameters. The extent of inventive activity is measured from the MEDLINE database on 16 million biomedical publications. We match these data with data on disease incidence. We show that medical research responds to changes in disease incidence and research opportunities. We also find that pharmaceutical innovation responds to aging- and obesity-induced changes in potential market size.
Keywords: induced innovation; technological opportunity; pharmaceutical innovation; nonprofit innovation
JEL Codes: I11; L31; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| aging (J14) | medical research effort (I10) |
| obesity-induced changes (I12) | medical research effort (I10) |
| medical research composition (C90) | research effort (C90) |
| disease incidence (I12) | research effort (C90) |
| demographic shifts (J11) | pharmaceutical innovation (O35) |
| disease incidence (I12) | technological opportunity effect (O33) |
| research effort (C90) | technological opportunity effect (O33) |