Does Public Scientific Research Complement Industry R&D Investment?
Author InfoToole, Andrew A. Abstract This research investigates the hypothesis that publicly funded scientific research complements private R&D investment in the pharmaceutical industry. New microlevel data on public research investment by the U.S. National Institutes of Health allow measures of basic and clinical research in seven medical areas to be included in a distributed lag model explaining pharmaceutical R&D investment. Using a panel of therapeutic classes observed over eighteen years, the analysis finds strong evidence that public basic and clinical research are complementary to pharmaceutical R&D and, thereby, stimulate private industry investment. However, differences in the relevance and degree of scientific and market uncertainty between basic and clinical public research lead to differences in the magnitude and timing of the pharmaceutical investment response. The results indicate that a dollar increase in public basic research stimulates an additional $8.38 in pharmaceut
Author InfoToole, Andrew A. Abstract This research investigates the hypothesis that publicly funded scientific research complements private R&D investment in the pharmaceutical industry. New microlevel data on public research investment by the U.S. National Institutes of Health allow measures of basic and clinical research in seven medical areas to be included in a distributed lag model explaining pharmaceutical R&D investment. Using a panel of therapeutic classes observed over eighteen years, the analysis finds strong evidence that public basic and clinical research are complementary to pharmaceutical R&D and, thereby, stimulate private industry investment. However, differences in the relevance and degree of scientific and market uncertainty between basic and clinical public research lead to differences in the magnitude and timing of the pharmaceutical investment response. The results indicate that a dollar increase in public basic research stimulates an additional $8.38 in pharmaceut
