Patient income and health innovation
Updated: Nov 13, 2019
Javad Moradpour & Aidan Hollis
This paper proposes and tests a model of investment into health innovation across therapeutic categories. It explicitly analyzes the relationship between the number of clinical trials in a disease area, the health losses from that disease, and the average income of people suffering from it. Average patient income is strongly predictive of the number of clinical trials, whether funded by industry or not. We are able to precisely estimate the extent of this income effect on the number of trials, and to identify both (a) the specific diseases that appear to be underfunded relative to their harm to human health and (b) the amount of additional funding required to bring innovation investment up to the present average.