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Adaptive R&D contract for urgently needed drugs: Lessons from COVID-19 vaccine development
This paper analyzes an incentive contract for new vaccine research and development (R&D) under pandemic situations such as COVID-19, considering the R&D contract’s adaptability to the pandemic. We study how the public sector (government) designs the adaptive R&D contract and offers it to...
Autores principales: | , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Published by Elsevier Ltd.
2023
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9359939/ https://www.ncbi.nlm.nih.gov/pubmed/35966621 http://dx.doi.org/10.1016/j.omega.2022.102727 |
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author | (Ryan) Choi, Ji-Hung Yoon, Jiho Song, Ju Myung |
author_facet | (Ryan) Choi, Ji-Hung Yoon, Jiho Song, Ju Myung |
author_sort | (Ryan) Choi, Ji-Hung |
collection | PubMed |
description | This paper analyzes an incentive contract for new vaccine research and development (R&D) under pandemic situations such as COVID-19, considering the R&D contract’s adaptability to the pandemic. We study how the public sector (government) designs the adaptive R&D contract and offers it to pharmaceutical enterprises. An agency-theoretic model is employed to explore the contract whose terms are an upfront grant as a fixed fee and a sales tax credit as an incentive tool, examining how the values of related parameters affect contract term determinations. We found that the adaptability factor derived from urgent policies such as emergency use authorization (EUA) as well as tax credits, can be utilized as practical incentive tools that lead vaccine developers to increase their effort levels for R&D success. We also found that public-private state-emergency contracts may not follow the conventional wisdom. Counterintuitively, dependency on tax credits (incentive part) decrease as the client’s degree of risk averseness increases in the emergency contract. |
format | Online Article Text |
id | pubmed-9359939 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2023 |
publisher | Published by Elsevier Ltd. |
record_format | MEDLINE/PubMed |
spelling | pubmed-93599392022-08-09 Adaptive R&D contract for urgently needed drugs: Lessons from COVID-19 vaccine development (Ryan) Choi, Ji-Hung Yoon, Jiho Song, Ju Myung Omega Article This paper analyzes an incentive contract for new vaccine research and development (R&D) under pandemic situations such as COVID-19, considering the R&D contract’s adaptability to the pandemic. We study how the public sector (government) designs the adaptive R&D contract and offers it to pharmaceutical enterprises. An agency-theoretic model is employed to explore the contract whose terms are an upfront grant as a fixed fee and a sales tax credit as an incentive tool, examining how the values of related parameters affect contract term determinations. We found that the adaptability factor derived from urgent policies such as emergency use authorization (EUA) as well as tax credits, can be utilized as practical incentive tools that lead vaccine developers to increase their effort levels for R&D success. We also found that public-private state-emergency contracts may not follow the conventional wisdom. Counterintuitively, dependency on tax credits (incentive part) decrease as the client’s degree of risk averseness increases in the emergency contract. Published by Elsevier Ltd. 2023-01 2022-08-09 /pmc/articles/PMC9359939/ /pubmed/35966621 http://dx.doi.org/10.1016/j.omega.2022.102727 Text en © 2022 Published by Elsevier Ltd. Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active. |
spellingShingle | Article (Ryan) Choi, Ji-Hung Yoon, Jiho Song, Ju Myung Adaptive R&D contract for urgently needed drugs: Lessons from COVID-19 vaccine development |
title | Adaptive R&D contract for urgently needed drugs: Lessons from COVID-19 vaccine development |
title_full | Adaptive R&D contract for urgently needed drugs: Lessons from COVID-19 vaccine development |
title_fullStr | Adaptive R&D contract for urgently needed drugs: Lessons from COVID-19 vaccine development |
title_full_unstemmed | Adaptive R&D contract for urgently needed drugs: Lessons from COVID-19 vaccine development |
title_short | Adaptive R&D contract for urgently needed drugs: Lessons from COVID-19 vaccine development |
title_sort | adaptive r&d contract for urgently needed drugs: lessons from covid-19 vaccine development |
topic | Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9359939/ https://www.ncbi.nlm.nih.gov/pubmed/35966621 http://dx.doi.org/10.1016/j.omega.2022.102727 |
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