What helps the development of new vaccine products : an economic analysis of R&D spending in the vaccine industry, the productivity of biotechnological research and related issues in science and technology policy
This thesis was motivated by concern regarding an alleged lack of investment in research and development of vaccine products which could offer considerable net benefit to societies, particularly in the developing world. The aim of this thesis is to provide decision support for science and technology policy which aims to promote private research and development in new vaccine products. The literature suggests that markets fail to allocate sufficient resources to the development of new vaccines. Science policy can attempt to influence the direction of research through government subsidies, targeted fiscal support, regulatory measures or policies designed to influence human capital formation. In order to assess the effectiveness of these measures in the context of the vaccine industry a R&D resource allocation model is empirically tested in Chapter Six. In a partial adjustment specification and error correction form, a relationship between the cost of funds and the allocation of R&D resources could be established for the US vaccine industry over a twenty five year period. It was also found that public sector research effort does not appear to 'crowd out' private sector R&D spending. Other factors emphasised in the literature, such as the relative market size and improvements in patent protection, were not significantly related to research intensity. In the Second Part of this thesis the scope has been extended to include firms in the biotechnology industry which play an important role in vaccine innovation. The focus of research in Chapters Seven and Eight is on collaborative research which is believed to be a particularly productive way to bring new vaccines to the market. In an empirical investigation of established US biotech firms it was suggested that companies which undertake more science or co-operate more closely with universities than their competitors are likely to show a higher level of research productivity. What could not be established is whether scientific activity results in superior research outcomes or whether successful companies attract star scientists who are more likely to publish the results of their work. This emphasises the importance of the promotion of scientific talent and the movement of scientists between the public and private sectors and internationally. It is suggested in Chapter Nine that the institutional structure of higher education has an important effect on the mobility of scientists: a country which imports highly-skilled personnel may maintain or improve its technological capabilities by this means. Using data from the British Higher Education Statistics Agency (HESA) it is suggested that contrary to belief, disciplines such as biological sciences experience a moderate net inflow of scientists from the private sector and abroad.