Research

The US Food and Drug Administration (FDA) expanded access pathway allows patients with life-threatening or serious conditions to access investigational drugs outside of trials, under certain conditions. The 21st Century Cures Act ('Cures Act') requires certain drug companies to publicly disclose their expanded access policies. We characterized the proportion of applicable US biopharmaceutical companies, with an oncology related drug, implementing Cures Act requirements for expanded access policies and whether available policies contain the information described in the Act. We found about one-third of applicable biopharmaceutical companies (32%, 140/423) implemented the Cures Act requirement to have a public expanded access policy. Less than one-third of public policies contained all described information (31%, 44/140). Larger companies and those with at least one drug receiving an FDA expedited designation (59% vs. 21%; P < 0.001), or at least one FDA-approved drug (57% vs. 28%; P < 0.001) were more likely to have a public policy. Our results suggest the Cures Act may be having a limited impact on its goals of supporting timely medical decisions and closing informational gaps for patients and doctors around expanded access to investigational oncology therapies, especially for products sponsored by smaller and newer companies.

With the recent growth of the sharing economy, regulators must frequently strike the right balance between private and public interests to maximize value creation. In this article, we argue that political competition is a critical ingredient that explains whether cities accommodate or ban ridesharing platforms and that this relationship is moderated in more populous cities and in cities with higher unemployment rates. We test our arguments using archival data covering ridesharing bans in various U.S. cities during the 2011–2015 period. We supplement these data with semistructured interviews. We find broad support for our arguments while mitigating potential endogeneity concerns. Our study has important implications for nonmarket strategy, entrepreneurship and innovation, and public-private partnership literatures. In addition, our findings inform policy debates on the sharing economy.

One of the grand challenges in healthcare is the limited availability of life-saving drugs and therapies. While providing early access to investigational drugs is seen as a potential solution to this issue, our understanding of what deters or facilitates firms from granting early access remains limited. We examine when firms provide early access to investigational oncology drugs from 1990 to 2020. Our study finds that while entrepreneurial firms are known as engines for developing novel drugs, they are less likely to provide early access due to uncertainties from thinner product pipelines and concerns over equity values. Regulatory certification significantly reduces such uncertainties, encouraging firms to provide early access, but its benefits are more pronounced for established firms. We discuss the intricacies involved in improving early access, highlighting the complex interaction between company incentives and industry structure.

We investigate how data privacy regulations shape research and development (R&D). Such regulations are designed to protect individuals, but the innovation process that develops valuable new products for those same individuals depends on collecting, analyzing, and sharing their data. We examine this tension in the context of the pharmaceutical industry, where data is a key input to R&D, and the European Union’s (EU) General Data Protection Regulation (GDPR), the most comprehensive data privacy regulation to date. Leveraging firm-level variation in exposure to the GDPR, we find that the regulation lowers clinical trials by 18 percent. Firms also shift the types of R&D they pursue: trials are less likely to include sites in the EU or to be conducted across multiple countries, and they target a narrower set of diseases. Research collaborations decline overall and shift away from new partners towards established relationships. When looking at R&D outcomes, we observe that trials take longer to complete, are less likely to succeed, and report results with greater delay. The decline in clinical trials is greatest among young firms. These findings reveal how data privacy regulations shape not only the rate of innovation but also the process by which it is pursued and its outcomes.

Startups are often confronted with opportunities to extend their core technologies into new product markets. While such moves hold the promise of creating new customer bases and hedging the risk of failure in existing pursuits, they also require expertise in unfamiliar domains which can be costly to obtain. We examine how startups’ product market entry decisions are shaped by portfolio ties - connections to other startups backed by the same venture capital investor. Portfolio ties to other startups operating in that product market can provide access to relevant expertise that should, on average, lower the barriers to entry. However, these ties can also constrain entry if investors seek to protect the market positions of the startup already operating in that market. We theorize that such protectionist action by the investor becomes more likely if the related portfolio firm’s product targeting that market is closer to commercialization. To test these ideas, we exploit the staggered release of the Cancer Genome Atlas, which revealed unexpected genetic links between cancers and thereby generated exogenous opportunities for therapeutic expansion. We find that portfolio ties increase treated startups’ likelihood of new market entry on average, especially for startups located outside the major life-sciences hubs who have fewer alternative avenues for accessing market-specific expertise. However, this effect reverses when portfolio peers are near commercialization. Startups with such peers become especially unlikely to enter the new market if the investor’s market protection imperative is heightened by those peers being narrowly focused on the market in question.

Previous title: “How Do Investors Shape Startups' Response to New Market Opportunities?”