Journal of Bioeconomics

, Volume 14, Issue 3, pp 217–241 | Cite as

Making profits working on patients’ expectations, a behavioral analysis of pharmaceutical clinical research



This paper presents a model that demonstrates how pharmaceutical companies can make profits from human experimentation by working on patients’ expectations and physicians’ inability to evaluate innovations in medical knowledge. In order to understand how profits can be made, it is important to analyze the effect the physician’s expectations have on patients, both in the enrolment process and in the collected effectiveness, as well as the nature of the physician’s interest in producing this effect. Starting from the process through which companies collect clinical evidence, the analysis will focus on the economic use of that data on the drug market and the national drug agency’s role. A model illustrates the companies’ potential opportunistic strategies as well as what the public stakeholder’s target should be. Is public intervention really necessary in order to regulate the imperfect market of drugs? In other words, taking imperfection due to the expectation process in human experimentation into account, is there another practicable path? The final normative analysis will try to answer these questions.


Pharmaceutical R&D Human experimentation Institutional Review Board Informed Consent Drug agency Medical researcher and research subject 

JEL Classification



Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Akerlof G. A. (1970) The market for “lemons”: Quality uncertainty and the market mechanism. The Quarterly Journal of Economics 84(3): 488–500CrossRefGoogle Scholar
  2. Appelbaum P. S., Roth L. H., Lidz C. (1982) The therapeutic misconception: Informed consent in psychiatric research. International Journal of Law and Psychiatry 5: 319–329CrossRefGoogle Scholar
  3. Ariely D. (2008) Predictably irrational, the hidden forces that shape our decisions (1st ed.). HarperCollins, New YorkGoogle Scholar
  4. Arrow K. J. (1963) Uncertainty and the welfare economics of medical care. American Economic Review 53(5): 941–973Google Scholar
  5. Blumenthal J. A. (2004) Law and emotions: The problem of affective forecasting. Indiana Law Journal 80: 155–238Google Scholar
  6. Braddock C. H., Fihn S. D., Levinson W., Jonsen A. R., Pearlman R. A. (1997) How doctors and patients discuss routine clinical decisions: Informed decision making in the outpatient setting. Journal of General Internal Medicine 12(6): 339–345Google Scholar
  7. Calabresi G. (1969) Reflection on medical experimentation in human. Daedalus 98(2): 387–405Google Scholar
  8. Coleman C. H. (2004) Rationalizing risk assessment in human subject research. Arizona Law Review 46: 1–51Google Scholar
  9. Daugherty C. K. (1999) Impact of therapeutic research on informed consent and the ethics of clinical trials: A medical oncology perspective. Journal of Clinical Oncology 17(5): 1601–1617Google Scholar
  10. Declaration of Helsinki, Ethical principles for medical research involving human subjects. (2008, October). 59thWMA General Assembly, Seoul.Google Scholar
  11. Emanuel E. J. (1995) A phase I trial on the ethics of phase I trials. Journal of Clinical Oncology 13(5): 1049–1051Google Scholar
  12. Emanuel E. J., Wendler D., Grady C. (2000) What makes clinical research ethical?.   Journal of the Medical Association 283(20): 2701–2711CrossRefGoogle Scholar
  13. Faden R. R., Beauchamp T. L., King N. M. P. (1986) A history and theory of informed consent. Oxford University Press, New YorkGoogle Scholar
  14. Grady C. (2001) Money for research participation: Does it jeopardize informed consent?.   American Journal of Bioethics 1(2): 40–44CrossRefGoogle Scholar
  15. Ippoliti, R. (2010). The market of human experimentation. European Journal of Law and Economics. doi: 10.1007/s10657-010-9190-y.
  16. Jolls C., Sunstein C. R., Thaler R. (1998) A behavioral approach to law and economics. Stanford Law Review 50(May): 1471–1550CrossRefGoogle Scholar
  17. Kahneman D., Tversky A. (1979) Prospect theory: An analysis of decision under risk. Econometrica 47(2): 263–291CrossRefGoogle Scholar
  18. Malani A. (2006) Identifying placebo effects with data from clinical trials. Journal of Political Economy 114(April): 236–256CrossRefGoogle Scholar
  19. Mas-Colell A., Whinston M. D., Green J. (1995) Microeconomic theory. Oxford University Press, OxfordGoogle Scholar
  20. Miller M. (2000) Phase I cancer trials: A collusion of misunderstanding. Hastings Center Report 30(4): 34–42CrossRefGoogle Scholar
  21. Moses H. III, Dorsey E. R., Matheson D. H. M., Thier S. O. (2005) Financial anatomy of biomedical research. Journal of the American Medical Association 294(11): 1333–1342CrossRefGoogle Scholar
  22. Sankar P. (2004) Communication and miscommunication in informed consent to research. Medical Anthropology Quarterly 18(4): 429–446CrossRefGoogle Scholar
  23. Simon H. (1947) Administrative behavior: A study of decision-making processes in administrative organizations. The Macmillian Co, New YorkGoogle Scholar
  24. Von Neumann J., Morgenstern O. (1944) Theory of games and economic behavior. Princeton University Press, Princeton, NJGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC. 2011

Authors and Affiliations

  1. 1.IEL—International Programme in Institutions, Economics & Law, Real Collegio Carlo AlbertoMoncalieriItaly

Personalised recommendations