Is There Underinvestment in R&D About Prevention?, Journal of Health Economics
Over US$20 billion is spent annually on medical research and development in the United States alone. Although good data are lacking, it is probable that only a tiny percentage goes to R&D about preventive goods and services ('prevention R&D'). In this paper, I hypothesize that this allocation of R&D dollars is inappropriate. Market incentives, combined with regulatory barriers associated with the Food and Drug Administration's 'do no harm' philosophy, make it plausible to conclude that we currently underfund prevention R&D. I find some support for this conclusion in an analysis of current funding of research about vitamin E.
Dranove, David. 1998. Is There Underinvestment in R&D About Prevention?. Journal of Health Economics. 17(1): 117-127.