Incentives for Pharmaceutical Innovation and Associated Welfare Implications: Evidence from the Orphan Drug Act


Mellon/ACLS Dissertation Completion Fellowships




There are more than 6,000 rare diseases without treatments available, many of which are severe or fatal without treatment. Due to small patient populations, private benefits to drug developers for rare disease drug development are small relative to social benefits. Thus, in the absence of external intervention, private manufacturers may neglect rare disease research. This dissertation examines incentives for medical innovation and the anticipated social benefits of rare disease research through the lens of the US Orphan Drug Act. It discusses the role of government in stimulating research in neglected disease areas and finds that benefits of new medical innovations are often underestimated. Insights from research are valuable not only for studying rare disease treatments in the US but also neglected tropical diseases such as Ebola, malaria, and tuberculosis.