This dissertation offers new insights into the determinants of biomedical science and pharmaceutical innovation, each in a self-contained chapter. The first chapter investigates the functioning of research tool markets, which are important input factors into science. Specifically, it observes why short-term distortions to supply have enduring effects on tool adoption and, thus, the direction of scientific research. The second chapter examines whether pharmaceutical companies adjust their follow-on innovation activities when patentability standards increase. To this end, it analyses changes in the innovation incentives caused by a drug’s marketing authorization. The third chapter explores the relationship between downstream shifts in demand and upstream research. It studies whether a policy-induced increase in market size affects scientific publishing by universities and corporations. In summary, evidence from these micro-economic analyses may contribute to designing effective and efﬁcient public policies that help stimulate R&D activities, foster the development of new pharmaceutical treatments, and eventually improve public health.
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