Dr Gaule will discuss his paper (with Ruchir Agarwal):
Based on the pharmaceutical industry’s innovation response to COVID-19, this paper studies how the direction, aggregate supply, and composition of R&D effort varies with market size. We find: (1) a highly elastic directed R&D response to fight COVID-19 with 40% of all new clinical trials directed towards COVID-19 by May 2020 ; (2) while other clinical trials were partially crowded out by COVID-19, the aggregate R&D effort increased by 60 percent despite the lockdowns; (3) the private sector remains significantly under-represented in the composition of R&D directed towards COVID-19, accounting for 20% fewer clinical trials than their public sector counterparts; and (4) the public-private gap in the composition of R&D is not unique to COVID-19, as the private sector generally tends to underinvest in diseases with large market size. Our theoretical and empirical results suggest that for a variety of factors - which blunt monetary incentives of private actors - too little private sector research is being directed towards diseases associated with the highest death burden.
About the Speaker
Dr Patrick Gaule is an applied microeconomist specialized in the economics of science and innovation. He work at the University of Bath as senior lecturer (associate professor). Prior to coming to Bath, He was assistant professor at CERGE-EI, research associate at Harvard and postdoctoral research fellow at MIT and the NBER.