Incentives for innovation are particularly relevant in the
pharmaceutical industry where not all social needs provide equally
profitable opportunities and where most OECD countries try to implement
different measures that promote research in these less profitable areas.
This book describes how incentives can be provided to deal with less
profitable activities when no clear markets exist for the innovations.
The book discusses alternative mechanisms to substitute for inexistent
markets, situations where traditional instruments have proven totally
insufficient, and the clear mismatch between the size of the markets
being targeted and the incentives being provided. Patents become an
ineffective way to incentivise R&D when the appropriability is low; this
book provides alternative ideas such as allowing for a period of data
exclusivity to firms that develop new drugs.