Quality and Quantity: Analyzing the Impact of Increases in Public R&D Funding on Private Pharmaceutical Outcomes using German Drug Benefit Assessments

Abstract

The global coronavirus pandemic has thrust public health systems and pharmaceutical industries into the global spotlight. As a result of this crisis, world governments will undoubtedly reexamine their role in supporting these industries. This study aims to investigate the relationship between public funding of research & development and private pharmaceutical quality and quantity outcomes. A difference-in-difference model is used to analyze the impact of increased National Institutes of Health (NIH) funding from the 2008 American Recovery and Reinvestment Act (ARRA) on new quality and quantity pharmaceutical outcomes from Germany’s drug pricing system. The analysis yielded modest statistical significance between the increase NIH funding and the quality of pharmaceutical production and partially corroborates the hypothesis that increases in public research funding contribute to enhanced pharmaceutical outcomes.