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Updated: Feb 13, 2026

In Silico Clinical Trials for Cardiovascular Disease
Published on: May 27, 2022
Do Firms Underinvest in Long-Term Research? Evidence from Cancer Clinical Trials
Eric Budish1, Benjamin N Roin2, Heidi Williams3
1Booth School of Business, University of Chicago, Chicago, IL.
Abstract:
We investigate whether private research investments are distorted away from long-term projects. Our theoretical model highlights two potential sources of this distortion: short-termism and the fixed patent term. Our empirical context is cancer research, where clinical trials--and hence, project durations--are shorter for late-stage cancer treatments relative to early-stage treatments or cancer prevention. Using newly constructed data, we document several sources of evidence that together show private research investments are distorted away from long-term projects. The value of life-years at stake appears large. We analyze three potential policy responses: surrogate (non-mortality) clinical-trial endpoints, targeted R&D subsidies, and patent design.
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