Through my research on innovation, pricing, and quality, I aim to advance scholarship, inform policy, and shape strategy to drive meaningful change in health care.

Incentives for innovation for neglected diseases

I was the lead author of a 2006 article proposing the priority review voucher program to encourage innovation for neglected diseases (Ridley et al. 2006). Thanks to collaboration with US Senators, the law was enacted in 2007. The FDA has awarded more than 80 vouchers and vouchers sell for more than $100 million each. Building on the success of the priority review voucher, we proposed Vector Expedited Review Vouchers (Ridley et al 2017) which became law in 2022. Another mechanism to encourage drug development is direct funding of research by government agencies. However, we show that across countries, some governments free ride, diverting funds to other diseases and purposes (Kyle et al 2017). Another mechanism is a transferable exclusivity voucher in which a drug developer is rewarded with longer market exclusivity for a different drug, but exclusivity delays generic entry and savings. We show that if governments and insurers pay almost all of the costs of the most expensive drugs, though, then exclusivity vouchers are not so different from direct government funding (Boyer et al 2022).

Pharmaceutical shortages and quality

We document that low and inflexible prices are associated with shortages (Ridley et al 2016; Yurukoglu et al 2017). Shortages could be rarer if prices for the oldest drugs and vaccines were higher and more flexible. Alternatively, we can accept occasional shortages and mitigate the harm through rationing, which was a successful strategy with the Hib vaccine (Liebman et al 2023). We also examine efforts to ensure drug quality by regulators (Cuddy et al 2023) and businesses (Ridley et al 2006).

Prices

Government policies play a pivotal role in shaping drug launch prices and price changes. We delved into the relationship between Medicare reimbursement and drug launch prices (Ridley and Lee 2020), as well as the regulation of price increases (Ridley and Zhang 2017). We also proposed a simple tool for forecasting market share in the US pharmaceutical market (Régnier and Ridley 2015).

Location

When businesses cluster, they engage in more intense price competition. So why cluster? We show that followers cluster near leaders to i) free ride on the demand information of the market leader (Ridley 2008), ii) because they can differentiate their products and mitigate price competition (Picone et al 2009), and iii) because zoning forces clustering (Ridley et al).

For more information, see my Google Scholar page.