Market immunity? How public safety warnings have little impact on drug sales volumes or company share prices
In a new article on The Conversation, University of Canterbury’s Associate Professor Jeremy Clark and Professor Jedrej Bialkowski look at how regulators must get the balance right between encouraging new drug creation and safeguarding public health.
Under the system used by drug regulators in the US, Europe and elsewhere, drug companies need only show from clinical trials that new drugs have short-term safety and efficacy in order to gain approval.
So, what happens if something goes wrong longer term?
Specifically, does the market itself punish drug companies when regulators issue warnings about a product’s safety, or withdraw it entirely? Our latest research set out to answer that question.
Companies don’t need to demonstrate a drug’s long-term safety and efficacy. The limited length of clinical trials is allowed in order to keep the cost of developing drugs from being so high that new drugs don’t get developed.