The impact of health insurance mandates on drug innovation: Evidence from the United States

An important health policy issue is the low rate of patient enrollment into clinical trials, which may slow down the process of clinical trials and discourage their supply, leading to delays in innovative life-saving drug treatments reaching the general population. In the US, patients' cost of participating in a clinical trial is considered to be a major barrier to patient enrollment. In order to reduce this barrier, some states in the US have implemented policies requiring health insurers to cover routine care costs for patients enrolled in clinical trials. This paper evaluates empirically how effective these policies were in increasing the supply of clinical trials and speeding up their completion, using data on cancer clinical trials initiated in the US between 2001 and 2007. Our analysis indicates that the policies did not lead to an increased supply in the number of clinical trials conducted in mandate states compared to non-mandate states. However, we find some evidence that once clinical trials are initiated, they are more likely to finish their patient recruitment in a timely manner in mandate states than in non-mandate states. As a result, the overall length to completion was significantly shorter in mandate states than in non-mandate states for cancer clinical trials in certain phases. The findings hint at the possibility that these policies might encourage drug innovation in the long run.