Frank P. Maier-Rigaud
Neurodegenerative Diseases (NDDs) occur when nerve cells in the brain or peripheral nervous system lose function over time and ultimately die. The risk of being affected by a neurodegenerative disease increases drastically with age. With increasing life expectancy neurodegenerative diseases have been on the rise. The absence of a cure for NDD implies a high burden to the individual patient but also a tremendous cost to society. This article advances some possible economic explanations for the absence of disease-modifying treatments for NDDs by exploring relevant non-medical hurdles in research and development. While the development of disease-modifying treatments for NDDs may present intrinsic hurdles existing economic research provides arguments why other explanations for the absence of causal therapies may play a role. Notably economic science can shed light on the incentives for developing causal treatments. In this article we analyse the innovation inhibiting effect of an already existing drug portfolio. Moreover we demonstrate that different regulatory mechanisms in essence price controls and health insurance as well as patent protection might distort companies’ incentives to innovate. This may tilt incentives towards research geared to smaller and lower incremental value innovations which could be an explanation for the lack of causal therapies in NDDs
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