Missing Markets for Innovation: Evidence from New Uses for Existing Drugs

We are grateful to Daron Acemoglu, Oren Bar-Gill, Daniel Fetter, Amy Finkelstein, Peter Ganong, Matthew Gentzkow, Daniel Hemel, Scott Hemphill, David Kamin, Louis Kaplow, Mark Lemley, Paul Milgrom, Abhishek Nagaraj, Matt Notowidigdo, Lisa Larrimore Ouellette, Al Roth, Elizabeth Sepper, Carolyn Stein, Chad Syverson, Melissa Wasserman, Brian Wright, and seminar participants at AALS (Law & Economics), Chicago Booth, Harvard Law & Economics, MIT Sloan, NBER Market Design, NBER Productivity Lunch, NBER Summer Institute (Law & Economics), Northwestern Kellogg, NYU Law, NYU Law & Economics, Penn Carey Law, Stanford, Texas Law, the Radcliffe Institute, TNIT, UC-Berkeley Haas, and UCLA, for comments; to Yali Friedman, Ben Berger, Amitabh Chandra, and Craig Garthwaite for data; and to Joey Anderson, Ryan Broll, Jeremy Brown, Anne Marie Bryson, Henry Manley, Tamri Matiashvili, Gideon Moore, Lia Petrose, Maya Roy, Mahnum Shahzad, Ralph Skinner, Liyang Sun, and Zahra Thabet for excellent research assistance. Research reported in this publication was supported by the National Institute on Aging (NIA) and the NIH Common Fund, Office of the NIH Director, through Grant U01- AG046708 to the National Bureau of Economic Research (NBER); the content is solely the responsibility of the authors and does not necessarily represent the official views of the NIH or NBER. This research was also funded in part by NIA grant P01AG005842, the Alfred P. Sloan Foundation, NSF Grant Number 1151497, the Polsky Center for Entrepreneurship and Innovation at the University of Chicago Booth School of Business, the Hultquist Faculty Research Endowment, the Knight Hennessy Scholars Program at Stanford University, the John M. Olin Program in Law and Economics at Stanford Law School, the B.F. Haley and E.S. Shaw Fellowship for Economics via the Stanford Institute for Economic Policy Research, the Sloan Foundation Graduate Fellowship on Innovation and Productivity via the NBER, and the National Science Foundation through grant DGE-1656518 (Durvasula) to Stanford University. While this paper was written, Williams was a visiting scholar and is currently working on contract as a research advisor to the Congressional Budget Office (CBO); the views expressed in this paper should not be attributed to CBO, nor to the National Bureau of Economic Research.

• September 4, 2025