TY - JOUR
T1 - Market failure in the pharmaceutical industry and how it can be overcome
T2 - The CureShare mechanism
AU - Levy, Moshe
AU - Rizansky, Adi
PY - 2014/3
Y1 - 2014/3
N2 - Allowing patients to take part in the initial investment for the development of cures for their illnesses can, under certain conditions, lead to the development of drugs that would have otherwise not been developed and to a dramatic welfare increase. We theoretically analyze these conditions. The suggested patient investment mechanism, which we call CureShare, does not involve any philanthropy or government subsidies. It is simply a way to overcome market failure. Based on empirical data, we estimate that applying this mechanism may save thousands of lives annually and may dramatically improve the quality of many others.
AB - Allowing patients to take part in the initial investment for the development of cures for their illnesses can, under certain conditions, lead to the development of drugs that would have otherwise not been developed and to a dramatic welfare increase. We theoretically analyze these conditions. The suggested patient investment mechanism, which we call CureShare, does not involve any philanthropy or government subsidies. It is simply a way to overcome market failure. Based on empirical data, we estimate that applying this mechanism may save thousands of lives annually and may dramatically improve the quality of many others.
KW - Innovation
KW - Market failure
KW - Pharmaceutical industry
KW - Utility of health
UR - http://www.scopus.com/inward/record.url?scp=84898539245&partnerID=8YFLogxK
U2 - 10.1007/s10198-013-0461-8
DO - 10.1007/s10198-013-0461-8
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C2 - 23417217
AN - SCOPUS:84898539245
SN - 1618-7598
VL - 15
SP - 143
EP - 156
JO - European Journal of Health Economics
JF - European Journal of Health Economics
IS - 2
ER -
