Scott Morton, Fiona and Seabright, Paul (2013) Research into biomarkers: how does drug procurement affect the design of clinical trials? Health Management, Policy and Innovation, vol. 1 (n° 3). pp. 1-15.

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Abstract

This paper examines incentives for pharmaceutical firms to invest in biomarkers that predict which groups of sufferers from a certain medical condition will respond well to a particular treatment. We show that when pricing of the treatment is imperfectly responsive to effectiveness, firms undertaking clinical trial have an incentive to expand the relevant treatment population in border both to increase the probability of a statistically significant result, and to increase future revenues. Firms may fail to include potentially promising biomarkers in clinical trials, may include such biomarkers without disclosing them in the public protocol, and may fail to disclose the relevance of clinically predictive biomarkers. We show how many existing pricing and procurement schemes create adverse incentives of this kind, and discuss various mechanisms that may help to mitigate such effects.