[PDF][PDF] Charted territory: Evidence from mapping the cancer genome and r&d decisions in the pharmaceutical industry

JL Kao - Available at SSRN 3883041, 2021 - aeaweb.org
Available at SSRN 3883041, 2021aeaweb.org
How does comprehensive basic scientific information shape private sector research
investments among heterogeneous firms? I assess the impact of large-scale public cancer
genome mapping studies, which systematically map the genetic abnormalities in cancer.
Using newly-constructed data from cancer genome mapping studies and clinical trials, I find
that publicly available mapping information increases private investments in clinical trials by
66%. The large-scale public release of such information has nuanced effects: it …
Abstract
How does comprehensive basic scientific information shape private sector research investments among heterogeneous firms? I assess the impact of large-scale public cancer genome mapping studies, which systematically map the genetic abnormalities in cancer. Using newly-constructed data from cancer genome mapping studies and clinical trials, I find that publicly available mapping information increases private investments in clinical trials by 66%. The large-scale public release of such information has nuanced effects: it disproportionately increases research among incumbents with previously tested drugs for related diseases and spurs research activity among firms with limited access to private mapping information. Cancer maps are associated with improvements in firms’ decision-making: when genetic data becomes available, firms are more likely to initiate and advance research investments that are likely to yield promising clinical results.
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