Market failure in the diffusion of clinician-developed innovations: The case of off-label drug discoveries
Medical doctors occasionally discover potentially valuable new off-label uses for drugs during their clinical practice. They apply these to help their own patients, but often have minimal incentives to invest in diffusing them further. Thus, the benefits that other clinicians might obtain are to som...
| Main Authors: | , , |
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
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Oxford University Press
2017
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| Online Access: | http://hdl.handle.net/1721.1/109473 https://orcid.org/0000-0002-7235-1032 |
| _version_ | 1826190793499475968 |
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| author | von Hippel, Eric A. DeMonaco, Harold de Jong, Jeroen P. J. |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management von Hippel, Eric A. DeMonaco, Harold de Jong, Jeroen P. J. |
| author_sort | von Hippel, Eric A. |
| collection | MIT |
| description | Medical doctors occasionally discover potentially valuable new off-label uses for drugs during their clinical practice. They apply these to help their own patients, but often have minimal incentives to invest in diffusing them further. Thus, the benefits that other clinicians might obtain are to some extent an externality from the perspective of the discoverer. This represents a form of market failure: effort invested in diffusion could lower adoption costs for many, but few innovators will invest that effort and social welfare will be accordingly reduced. In this study we explore for empirical evidence for the market failure just described, and do find evidence for it. In a sample of US clinicians, diffusion efforts increase the diffusion of generally valuable discoveries, but innovating clinicians typically invest little to support diffusion. We conclude with a discussion of how such a market failure could be addressed. |
| first_indexed | 2024-09-23T08:45:28Z |
| format | Article |
| id | mit-1721.1/109473 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T08:45:28Z |
| publishDate | 2017 |
| publisher | Oxford University Press |
| record_format | dspace |
| spelling | mit-1721.1/1094732019-05-17T07:18:05Z Market failure in the diffusion of clinician-developed innovations: The case of off-label drug discoveries von Hippel, Eric A. DeMonaco, Harold de Jong, Jeroen P. J. Sloan School of Management von Hippel, Eric A. DeMonaco, Harold von Hippel, Eric A. Medical doctors occasionally discover potentially valuable new off-label uses for drugs during their clinical practice. They apply these to help their own patients, but often have minimal incentives to invest in diffusing them further. Thus, the benefits that other clinicians might obtain are to some extent an externality from the perspective of the discoverer. This represents a form of market failure: effort invested in diffusion could lower adoption costs for many, but few innovators will invest that effort and social welfare will be accordingly reduced. In this study we explore for empirical evidence for the market failure just described, and do find evidence for it. In a sample of US clinicians, diffusion efforts increase the diffusion of generally valuable discoveries, but innovating clinicians typically invest little to support diffusion. We conclude with a discussion of how such a market failure could be addressed. 2017-05-31T19:07:56Z 2017-05-31T19:07:56Z 2016-08 Article http://purl.org/eprint/type/JournalArticle 0302-3427 1471-5430 http://hdl.handle.net/1721.1/109473 von Hippel, Eric A., Harold DeMonaco, and Jeroen P. J. de Jong. "Market failure in the diffusion of clinician-developed innovations: The case of off-label drug discoveries." Science and Public Policy, 44(1), (February 2017), 121-131. PUBLISHER_CC https://orcid.org/0000-0002-7235-1032 en_US https://doi.org/10.1093/scipol/scw042 Science and Public Policy Creative Commons Attribution 4.0 International License http://creativecommons.org/licenses/by/4.0/ application/octet-stream Oxford University Press Oxford University Press |
| spellingShingle | von Hippel, Eric A. DeMonaco, Harold de Jong, Jeroen P. J. Market failure in the diffusion of clinician-developed innovations: The case of off-label drug discoveries |
| title | Market failure in the diffusion of clinician-developed innovations: The case of off-label drug discoveries |
| title_full | Market failure in the diffusion of clinician-developed innovations: The case of off-label drug discoveries |
| title_fullStr | Market failure in the diffusion of clinician-developed innovations: The case of off-label drug discoveries |
| title_full_unstemmed | Market failure in the diffusion of clinician-developed innovations: The case of off-label drug discoveries |
| title_short | Market failure in the diffusion of clinician-developed innovations: The case of off-label drug discoveries |
| title_sort | market failure in the diffusion of clinician developed innovations the case of off label drug discoveries |
| url | http://hdl.handle.net/1721.1/109473 https://orcid.org/0000-0002-7235-1032 |
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