R&D Incentives For Neglected Diseases - The Impact Of Firm Characteristics On New Product Development

Abstract

Although neglected diseases of developing countries are beginning to receive more attention from companies because of rising interest in corporate social responsibility and government incentive policies, the allocation of research funding to these diseases still remains extremely low. In this study, an ordinary least square regression methodology is used to decipher the impacts of firm-level characteristics such as revenue volume, headquarter location, pipeline size and business structure on R&D incentives for neglected diseases. Findings reveal that, research on neglected diseases by top 20 pharmaceutical firms is positively correlated with spillovers from other research (including animal health) and with European headquarters. Research on neglected diseases with greater burdens, e.g. Malaria and TB, tends to be done by firms with the greater revenue size; and research on the neglected diseases with smaller burdens, e.g. Dengue and Typhoid, tends to be done by firms with somewhat smaller revenue size. Based on these findings, appropriate policy implications are then drawn.