The Cost of Diversifying R&D (Job Market Paper) [Link]
Presentations: American Society of Health Economics 2026, Healthcare Innovation Working Group 2026.
Discussed in forthcoming textbook by Lawton R. Burns.
Abstract: Firms sometimes pursue multiple product candidates to increase the likelihood that at least one reaches the market. Leveraging quasi-experimental variation and novel data on pharmaceutical R&D contracts, I show that this diversification by firms is costly. When firms invest in parallel candidates, they are less likely to develop at least one successful product, and when they do, it takes longer to arrive. Heterogeneity in the effects is consistent with principal-agent frictions. I develop a model of corporate investment in which parallel R&D arises from three mechanisms: complementarity, concavity in returns, and risk preferences. Structural estimation reveals that early-stage candidates are complementary and the majority of firms act risk averse. My model explains contracting patterns in pharmaceutical R&D better than models that assume risk-neutral firms or linear, orthogonal returns on investment.
Working Papers
Sites and Subjects: Selection in Clinical Trials
with Olivia Zhao
Presentations: American Society of Health Economics 2026
Abstract: Routine care costs of clinical trial participation are not always covered by insurance, which may shape who participates in trial. We ask whether increased coverage expands access to medical innovation for patients and shapes which medical innovations reach the market. We assemble a 2018 to 2023 panel of U.S. oncology trial sites, linking ClinicalTrials.gov and TrialTrove records to hand-collected state coverage mandates and ZIP-code level demographic data from ACS. A difference-in-differences design exploits the 2022 Clinical Treatment Act, which extended routine-cost coverage to Medicaid beneficiaries in states lacking prior mandates. Overall, trial and site counts did not rise, but new trial sites are shifted to lower-income ZIP codes. Subsidizing participation appears to relocate research, shifting the pool of potential enrollees towards lower socioeconomic populations.
Speed vs. Power: Enrollment Selection in Clinical Trials
Presentations: American Society of Health Economics 2025
Abstract: Pharmaceutical firms compete for scarce, eligible clinical trial participants. I document that 49% trials, including trials for drugs ultimately approved by the FDA, fail to meet their target enrollment levels. I produce new measures of unmet enrollee demand and markets for enrollees using protocol characteristics and enrollment windows. I use these measures to study the trade-off that firms make when choosing enrollment levels, between speed and probability of approval. Specifically, I leverage a 2016 policy that reformed R&D disclosure for NIH-funded trials, using Phase 2 and 3 trials from InformaPharma. A difference-in-differences design estimates a decrease in reported trial duration after the reform for NIH-funded trials relative to non-NIH funded trials. This decrease in trial duration is smaller in enrollee markets where enrollees are concentrated in a few trial sponsors, rather than distributed evenly over the competing trials. These effects suggest that enrollment is a binding constraint for the speed of medical innovation.
Selected Works in Progress
Make and Buy: Incomplete Markets from Own-Production
Publications
The Best Way to Value Biotech for Deal Making and Investments
IAM Law Business Research, October 2020