Economics Research Seminar – Dr Andrea Salas Ortiz

Title: Reflecting public contributions to R&D in pharmaceutical pricing policy: a quantitative framework

Date: Wednesday 22 April 2026

Time: 13:30 to 14:30

Venue: NUBS.2.05 / Online

If you would like to attend, please register using the following link

Reflecting public contributions to R&D in pharmaceutical pricing policy: a quantitative framework

Speaker:            Dr Andrea Salas Ortiz

Dr Andrea Salas Ortiz is Research Fellow, Centre for Health Economics at University of York

Abstract:

Pharmaceutical pricing debates focus on the trade-off between ensuring affordable access to existing medicines (static efficiency) and maintaining incentives for future drug development (dynamic efficiency). While pull incentives are well studied, the role of push incentives—such as public investment in R&D—has received less attention. Ignoring this contribution risks society “paying twice” for innovation: first through public funding of research and then through high prices for patented medicines. This paper develops a quantitative framework to optimise the balance between three policy levers: the share of value paid to manufacturers, the level of public R&D investment, and the extent of any clawback of public funds. Using parameters from the literature and numerical optimisation, the results suggest that increasing public R&D can improve overall population health, and that clawbacks are generally not optimal unless manufacturer payments are already excessively high.