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October 11, 2004
Prices and Innovation
Alex Tabarrok over at Marginal Revolution has called attention to a very interesting study on the financial aspects of drug discovery. Price reductions could have a disproportionate effect on R&D, the authors say, which fits in with my personal industry experience. If you cut everything by, say, 20%, you're not going to have just 20% fewer drugs to show for it. It isn't linear (not much is, as far as I'm concerned. . .) (Note his correction, though, which makes the effect less drastic, but also see Tyler Cowen's post just above the original post.)
That inspired this post over at Asymmetrical Information. Jane Galt finds the prospect "frankly terrifying". There are 80 comments so far - it's quite a discussion, and I encourage anyone interested in the issue to have a look.
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