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).
- David B. Ridley, Peng Sun, and Chenxi Xu. 2025. “Optimal Push, Pull, and Failure Funding for Global Health“. Working paper.
- David B. Ridley, Agustín Martín Lasanta, Ffion Storer Jones, and Sarah Ridley. 2024. “European Priority Review Vouchers for Neglected Disease Product Development.” British Medical Journal: Global Health, 9:e013686.
- Jeffrey Moe, Alan Ayers, Nick Hamon, Derric Nimmo, and David B. Ridley. 2023. “How to Make the Most of a New Voucher Program, Encourage Pesticide Development, and Prevent Disease.” Health Affairs Forefront.
- Beth Boyer, Adam Kroetsch, Andrea Thoumi, and David B. Ridley. 2022. “How to Motivate Drug Development for Infectious Diseases.” Health Affairs Forefront.
- Beth Boyer, Adam Kroetsch, and David B. Ridley. 2022. “Design of a Transferable Exclusivity Voucher Program.” Duke Margolis Center for Health Policy White Paper.
- David B. Ridley, Pranav Ganapathy, and Hannah E. Kettler. 2021. “US Tropical Disease Priority Review Vouchers: Lessons in Promoting Drug Development and Access.” Health Affairs, 40(8): 1243-1251.
- Margaret K. Kyle, David B. Ridley, and Su Zhang. 2017. “Strategic Interaction among Governments in the Provision of a Global Public Good,” Journal of Public Economics, 156: 185–199. Summary
- David B. Ridley, Jeffrey L. Moe, and Nick Hamon. 2017. “A Voucher System to Speed Review Could Promote a New Generation of Insecticides to Fight Vector-Borne Diseases.” Health Affairs, 36(8): 1461-1468.
- David B. Ridley and Stephane A. Régnier. 2016. “The Commercial Market for Priority Review Vouchers.” Health Affairs, 35(5): 776-783.
- David B. Ridley, Jennifer Dent, and Christopher Egerton-Warburton. 2016. “Efficacy of the Priority Review Voucher Program.” Journal of the American Medical Association, 315(15): 1659-1660.
- David B. Ridley. 2015. “The Regulatory Burden of the Priority Review Voucher Program.” Health Affairs Forefront.
- Joshua S. Gans and David B. Ridley. 2013. “Innovation Incentives under Transferable Fast-Track Regulatory Review.” Journal of Industrial Economics. Vol. 61, No. 3: 789-816. (Preprint)
- Towse, Adrian, Eric Keuffel, Hannah E. Kettler, and David B. Ridley. 2012. “Drugs and Vaccines for Developing Countries.” The Oxford Handbook of the Economics of the Biopharmaceutical Industry, 302-335. (Preprint)
- David B. Ridley and Alfonso Calles Sánchez. 2010. “Introduction of European Priority Review Vouchers to Encourage Development of New Medicines for Neglected Diseases.” The Lancet. 376 (9744): 922-927. (Preprint)
- Jeffrey L. Moe, Henry G. Grabowski, and David B. Ridley. 2009. “FDA Review Vouchers.” The New England Journal of Medicine. 360 (8): 837-838.
- David B. Ridley, Henry G. Grabowski, and Jeffrey L. Moe. 2006. “Developing Drugs for Developing Countries.” Health Affairs. 25 (2): 313-324. Appendix (Preprint)
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).
- Eli Liebman, Emily C. Lawler, Abe Dunn, and David B. Ridley (randomized author order). 2023. “Consequences of a Shortage and Rationing: Evidence from a Pediatric Vaccine.” Journal of Health Economics, 92: 102819. (NBER Preprint)
- Emily Cuddy, Yun Peng Lu, and David B. Ridley. 2023. “FDA Global Drug Inspections: Surveillance of Manufacturing Establishments Remains Well Below Pre-COVID-19 Levels.” Health Affairs. 42(12): 1758-1766.
Cited by the House Committee on Energy and Commerce in its hearing on drug inspections. - Ali Yurukoglu, Eli Liebman, and David B. Ridley. 2017. “The Role of Government Reimbursement in Drug Shortages.” American Economic Journal: Economic Policy, 9(2): 348–382. (Preprint)
- David B. Ridley, Xiaoshu Bei, and Eli Liebman. 2016. “No Shot: US Vaccine Prices and Shortages.” Health Affairs, 35(2): 235-241. (Preprint) (Summary in The New York Times)
- David B. Ridley, Judith M. Kramer, Hugh H. Tilson, Henry G. Grabowski, and Kevin A. Schulman. 2006. “Spending on Postapproval Drug Safety.” Health Affairs, 25(2): 420-428.
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).
- David B. Ridley and Chung-Ying Lee. 2020 “Does Medicare Reimbursement Drive up Drug Launch Prices?” The Review of Economics and Statistics. 102(5): 980-993. (Video)
- David B. Ridley and Su Zhang. 2017. “Regulation of Price Increases.” International Journal of Industrial Organization, 50: 186–213. (Preprint)
- Stephane A. Régnier and David B. Ridley. 2015. “Forecasting Market Share in the US Pharmaceutical Market.” Nature Reviews Drug Discovery. 14 (9): 594-595. Supplement. (Preprint)
- David B. Ridley. 2015. “Payments, Promotion, and the Purple Pill.” Health Economics. 24 (1): 86-103. (Preprint)
- Peter Arcidiacono, Paul Ellickson, Peter Landry, and David B. Ridley. 2013. “Pharmaceutical Followers.” International Journal of Industrial Organization. 31 (5): 538–553 (NBER Preprint)
Paul Geroski Award for one of the two best papers in the journal that year. - Margaret K. Kyle and David B. Ridley. 2007. “Would Greater Transparency and Uniformity of Health Care Prices Benefit Poor Patients?” Health Affairs. 26 (5): 1384-1391. (Preprint)
- Henry G. Grabowski, David B. Ridley, and Kevin A. Schulman. 2007. “Entry and Competition in Generic Biologics.” Managerial and Decision Economics. 28: 439-451. (Preprint)
- David B. Ridley and Kirsten Axelsen. 2006. “Impact of Medicaid Preferred Drug Lists on Therapeutic Adherence.” Pharmacoeconomics. 24, Suppl. 3: 65-78.
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).
- David B. Ridley. 2013. “Hotelling’s Law.” In D. Teece and M. Augier, eds. The Palgrave Encyclopedia of Strategic Management. (Preprint)
- David B. Ridley, Frank A. Sloan, and Yan Song. “Retail Zoning and Competition.”
- Gabriel A. Picone, David B. Ridley, and Paul A. Zandbergen. 2009. “Distance Decreases with Differentiation: Strategic Agglomeration by Retailers.” International Journal of Industrial Organization. 27 (3): 463-473. (Preprint)
- David B. Ridley. 2008. “Herding versus Hotelling: Market Entry with Costly Information.” Journal of Economics and Management Strategy. 17 (3): 607-631. (Preprint)
For more information, see my Google Scholar page.