Drug Trial Economics

Surrogates stimulate cancer investments

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Science  29 May 2015:
Vol. 348, Issue 6238, pp. 986-987
DOI: 10.1126/science.348.6238.986-d

Allowing the use of surrogate (nonmortality) endpoints in clinical trials could lead drug companies to invest more in treatments for early-stage cancers and prevention. Long lags occur from when a drug patent is filed until it can be commercialized, a result of lengthy clinical trials that often have to demonstrate impacts on survival. Long lags leave less time for companies to recoup investments before patent expiration, skewing investment toward late-stage cancers for which shorter survival times lead to faster trials. Budish et al. compiled drug and trial data back to 1973 and show that the use of surrogate endpoints increased private drug research investments for cancers that otherwise would have long commercialization lags and diminished investment.

Am. Econ. Rev. 10.1257/aer:20131176 (2015); final accepted version at http://economics.mit.edu/files/10363.

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