Economics of Innovation

The development of innovative health technologies is essential for improving the quality and efficiency of health care provision. The marketing of innovative medicines, diagnostics and other medical technologies is required to address public health priorities and to tackle patients’ unmet medical needs, while expediting patients’ access to innovation helps to maximise societal health gains and value.

However, the production of medical innovation involves a lengthy, costly, risky and scientifically challenging R&D process. Innovators carry out huge investments where the expected return is highly uncertain as projects may fail, either because they do not provide enough value or because patients cannot access the treatments due to systems being unable to afford the price.

OHE leads a wide-ranging programme of research on how to maximise the effectiveness and efficiency of R&D. Aimed at promoting innovation in health care, this theme addresses questions such as:

  • How can regulation and incentives be optimally designed to maximise the efficiency and effectiveness of medical R&D and innovation? Can be they used to drive innovation in priority areas like anti-microbial resistance or neglected tropical diseases?
  • How can innovative pricing and financing solutions help to incentivise investment in R&D, and maximise the production of and access to innovative treatments (such as personalised medicines, advanced therapies, orphan medicinal products, and cures)?
  • What role do alternative pathways of clinical development and evidence generation (i.e. the use of real-world evidence) play in maximising R&D efficiency and patient access to medical innovation?  
  • What role does market competition play in promoting investment in R&D and maximising access to medical innovation?

Key objective for this research theme:

  • Promoting innovation in health care, increasing our understanding of the value of innovation, and encouraging research and development

OHE’s policy positions:

  • Optimal innovation requires regulation and reimbursement processes that balance willingness and ability to pay for new technologies with the benefits of future research and development.
  • New models of innovation should aim to streamline development, reduce costs and speed patient benefit.

 

Publications

Latest news

This research by a team of OHE and IHE researchers estimates the value added by second...

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OHE Lunchtime Seminar with Pedro Pita Barros on ‘Incentives for R&D, Competition and...