Prof. Lucy Xiaolu Wang, Ph.D.

Articles in Refereed Journals

Chatterjee, Chirantan; Chugunova, Marina; Ghosh, Mainak; Singhal, Abhay; Wang, Lucy Xiaolu (2023). Human Mediation Leads to Higher Compliance in Digital Mental Health: Field Evidence from India, Frontiers in Behavioral Economics, 2. DOI

Kreyer, Ann-Christin; Wang, Lucy Xiaolu (2022). Collaborating Neuroscience Online: The Case of the Human Brain Project Forum, PLoS One, 17 (12). DOI

• This paper analyzes user interactions on the public-access online forum of the Human Brain Project (HBP), a major European Union-funded neuroscience research initiative, to understand the utility of the Forum for collaborative problem solving. We construct novel data using discussion forum posts and detailed user profiles on the HBP Forum. We find that HBP Forum utilization is comparable to that of a leading general-interest coding platform, and that online usage metrics quickly recovered after an initial Covid-19-related dip. Regression results show that user interactions on the Forum are more active for questions on programming and in HBP core areas. Further, Cox proportional hazard analyses show that such problems are solved faster. Forum posts with users from different countries tend to be discussed more actively but solved slower. Higher shares of administrator support tend to solve problems faster. There are no clear patterns regarding gender and seniority. Our results suggest that building novel collaborative forums can support researchers working on complex topics in challenging times.
• Also published as: Max Planck Institute for Innovation & Competition Research Paper No. 22-10

Wang, Lucy Xiaolu (2021). Medicines Patent Pool and HIV Drug Cocktail Diffusion and Innovation, Academy of Management Proceedings, 2021 (1). DOI

• Designed to reward innovation, patent protection often leads to high drug prices that make life-saving medicines unaffordable for patients. This tension further increases patent infringement and invalidation to reduce prices, particularly in developing countries. The situation is serious for treatments that require multiple drugs owned by different firms with numerous patents, notably for HIV. I study the impact of the first joint licensing platform for drug bundling, the Medicines Patent Pool (MPP), on global drug diffusion and innovation. The pool allows generic firms worldwide to license drug bundles cheaply and conveniently for sales in a set of developing countries. I construct a novel dataset from licensing contracts, public procurement, clinical trials, and drug approvals. Using difference-in-differences methods, I find robust evidence that the pool leads to a substantial increase in the generic supply of drugs purchased. In addition, branded-drug makers and other entities, such as public institutions, respond to the pool by increasing the number of new clinical trials. The R&D input increase is accompanied by increases in generic drug product approvals. Finally, I estimate a simple structural model to quantify welfare gains and simulate counterfactuals. The total benefit to consumers and firms far exceeds the associated costs. The MPP has become the key implementing partner for the WHO's COVID-19 Technology Access Pool and deserves more future research.

Wang, Lucy Xiaolu (2021). The Complementarity of Drug Monitoring Programs and Health It for Reducing Opioid-Related Mortality and Morbidity, Health Economics, 30 (9), 2026-2046. DOI

• In response to the opioid crisis, each US state has implemented a prescription drug monitoring program (PDMP) to collect data on controlled substances prescribed and dispensed in the state. I study whether health information technology (HIT) complements patient prescription data in PDMPs to reduce opioid-related mortality and morbidity. A novel dataset is constructed that records state policies that integrate PDMP with HIT and facilitate interstate data sharing. Using difference-in-differences models, I find that PDMP-HIT integration policies reduce opioid-related inpatient morbidity. The reductions are substantial in states that established integration without ever mandating the use of a PDMP. A mechanism test suggests that PDMP integration works mainly through the hospital system while a mandate affects legal opioids prescription. The impacts from integration are strongest for the vulnerable groups—middle-aged, low-to middle-income patients, and those with public insurance. There is suggestive evidence that interstate data sharing further complements integration despite not having a significant impact independently. The results are robust to a set of tests using alternative specifications and measures. The total benefits from integration far exceed the associated costs.

Epstein, Jordan; Nicholson, Sean; Wang, Lucy Xiaolu; Hempstead, Katherine; Asin, Sam (2020). The Secret Menu in Health Care: A Cash Market for Imaging in California, INQUIRY: The Journal of Health Care Organization, Provision, and Financing 2020. DOI

• In addition to the prices they negotiate with private health insurers, most providers also have a cash price schedule for patients who have the wherewithal to ask and are willing to pay in full when they receive a service. This is the first study that estimates the potential cost saving of allowing privately-insured consumers to observe both in-network negotiated prices and cash prices, which is of particular interest given the growing importance of high-deductible health plans and a recent executive order mandating greater price transparency. Using data from five private health insurers and 142 imaging facilities in the San Francisco Bay Area, we estimate that patients could save between 10% and 22% of their insurer’s in-network price by paying cash. Potential savings are much larger (between 45% and 64% of their insurer’s in-network price) if consumers observe both cash and in-network prices and select the facility in the region offering the lowest price for a particular service.
• Also published as: Max Planck Institute for Innovation & Competition Research Paper No. 21-05

Contributions to Collected Editions

Cassidy, Alecia W.; Tower, Edward; Wang, Lucy Xiaolu (2015). Manufacturing Fetishism: The Neo-Mercantilist Preoccupation with Protecting Manufacturing, in: Amitrajeet Batabyal, Peter Nijkamp (eds.), The Region and the Trade: New Analytical Directions, 137-175. New Jersey: World Scientific. DOI

• Also published as: Economic Research Initiatives at Duke (ERID) Working Paper No. 227

Discussion Papers

Byrski, Dennis; Wang, Lucy Xiaolu (2024). Marketing Authorization and Strategic Patenting: Evidence from Pharmaceuticals. DOI

• Patents are designed to incentivize innovation, but pharmaceutical firms often extend market exclusivity with secondary patents on marginally beneficial improvements. Such behaviors evoke discussions about raising patentability standards. This study examines whether pharmaceutical firms move away from filing strategic patents once the focal drug gains marketing authorization and the disclosed trial-related information becomes novelty-threatening prior art. We construct novel patent-drug dyadic data and leverage unique European drug patent and marketing contexts. Using an event study methodology, we exploit plausibly exogenous variation in the length of time from patent filing to drug approval. First, we illustrate that drugs with early and late marketing authorization share similar ex ante patent and drug characteristics. Second, we support the hypothesis that strategic patenting behavior decreases substantially after marketing authorization. In contrast, meaningful follow-on innovations remain unaffected. Third, we show that these effects are likely driven by obstacles in the enforceability of marginal patents filed after approval. We analyze heterogeneity across firm type, patent type, disease type, and enforceability. Our results suggest that post-marketing increases in patentability standards are welfare-enhancing with examiner scrutiny and firm self-adjustment. We highlight the importance of better data provision to patent examiners to increase the quality of follow-up inventions.

Wang, Lucy Xiaolu (2023). A Cost-Benefit Analysis of the Medicines Patent Pool, Max Planck Institute for Innovation & Competition Research Paper, No. 23-18. DOI

• Understanding the cost and benefit of global public health institutions is important but challenging. This study provides a cost-benefit analysis of the first public health-oriented patent pooling and licensing institution, the Medicines Patent Pool (MPP), which is devoted to improving generic drug licensing and supply in low- and middle-income countries. A simple structural model of demand and supply is estimated on a dataset that covers 103 LMIC and 29 HIV drugs with data on sales, MPP licenses, patents, country-year level diseases and demographics, and institutional factors during 2007-2017. Counterfactuals are simulated in the absence of the MPP or with further expansions. The estimated benefits to consumers and firms far exceed the operating costs.

Kreyer, Ann-Christin; Wang, Lucy Xiaolu (2022). Collaborating Neuroscience Online: The Case of the Human Brain Project Forum, Max Planck Institute for Innovation & Competition Research Paper, No. 22-10. DOI

• This paper analyzes user interactions on the public-access online forum of the Human Brain Project (HBP), a major European Union-funded neuroscience research initiative, to understand the utility of the Forum for collaborative problem solving. We construct novel data using discussion forum posts and detailed user profiles on the HBP Forum. We find that HBP Forum utilization is comparable to that of a leading general-interest coding platform, and that online usage metrics quickly recovered after an initial Covid-19-related dip. Regression results show that user interactions on the Forum are more active for questions on programming and in HBP core areas. Further, Cox proportional hazard analyses show that such problems are solved faster. Forum posts with users from different countries tend to be discussed more actively but solved slower. Higher shares of administrator support tend to solve problems faster. There are no clear patterns regarding gender and seniority. Our results suggest that building novel collaborative forums can support researchers working on complex topics in challenging times.
• Also published in: PLoS ONE 17(12): e0278402

Wang, Lucy Xiaolu; Wilson, Nicholas (2022). U.S. State Approaches to Cannabis Licensing, Max Planck Institute for Innovation & Competition Research Paper, No. 22-09.

• U.S. states have taken varied approaches to licensing cannabis businesses under federal prohibition, but up to now there is limited research on cross-state licensing approaches. This paper provides a systematic analysis of the current licensing strategies taken by all states that have passed medical cannabis laws (MCLs)/recreational cannabis laws (RCLs). We construct comprehensive data on cannabis business licenses offered in each state, as well as metrics for license categories, cost, and issuance volume. We then analyze patterns between these metrics, also considering how long ago states implemented MCLs/RCLs, qualitative licensing aspects, state ideology and voting preference, and state cannabis taxation data. We observe that states tend to license medical cannabis more restrictively than adult-use cannabis: i.e., by offering licenses in fewer categories, at higher cost, in lower issuance volume, and more often mandating vertical integration. Additionally, states that implemented MCLs/RCLs earlier tend to offer licenses in more categories, at lower cost, and in greater issuance volumes. Further, though states that implemented MCLs recently lean conservative and Republican, we do not observe clear relationships between ideology or voting preference and licensing policy. In our supporting results, we observe that a greater share of states with complex licensing structures impose non-retail price cannabis taxes than states overall, and we discuss how states have changed their licensing policies over time.
• Available at SSRN

Wang, Lucy Xiaolu (2021). The Complementarity of Drug Monitoring Programs and Health IT for Reducing Opioid-Related Mortality and Morbidity, Max Planck Institute for Innovation & Competition Research Paper, No. 21-14. DOI

• In response to the opioid crisis, each U.S. state has implemented a prescription drug monitoring program (PDMP) to collect data on controlled substances prescribed and dispensed in the state. I study whether health information technology (HIT) complements the availability of patient data in PDMPs to reduce opioid-related mortality and morbidity. I construct a novel dataset that records state policies that integrate PDMP with HIT and facilitate interstate data sharing. Using difference-in-differences models, I find that PDMP-HIT integration policies reduce opioid-related mortality and morbidity. The reductions in inpatient morbidity are substantial in states that established integration without ever mandating the use of a PDMP. The impacts are strongest for the most vulnerable groups – middle-age, low- to middle-income patients, and those with public insurance. I find suggestive evidence that interstate data sharing further complements integration despite not having a significant impact independently. The total benefits from integration far exceed the associated costs.

Epstein, Jordan; Nicholson, Sean; Wang, Lucy Xiaolu; Hempstead, Katherine; Asin, Sam (2021). The Secret Menu in Health Care: A Market for Imaging in California, Max Planck Institute for Innovation & Competition Research Paper, No. 21-05.

• In addition to the prices they negotiate with private health insurers, most providers also have a cash price schedule for patients who have the wherewithal to ask and are willing to pay in full when they receive a service. This is the first study that estimates the potential cost saving of allowing privately-insured consumers to observe both in-network negotiated prices and cash prices, which is of particular interest given the growing importance of high-deductible health plans and a recent executive order mandating greater price transparency. Using data from five private health insurers and 142 imaging facilities in the San Francisco Bay Area, we estimate that patients could save between 10 percent and 22 percent of their insurer’s in-network price by paying cash. Potential savings are much larger (between 45 percent and 64 percent of their insurer’s in-network price) if consumers observe both cash and in-network prices and select the facility in the region offering the lowest price for a particular service.
• Available at SSRN
• Also published in: INQUIRY - The Journal of Health Care Organization, Provision, and Financing, Volume 57, First published online December 25, 2020

Wang, Lucy Xiaolu (2020). Global Drug Diffusion and Innovation with a Patent Pool: The Case of HIV Drug Cocktails. DOI

• Designed to reward innovation, patent protection often leads to high drug prices that make life-saving medicines unaffordable for patients. This tension further induces increasing patent infringement and invalidation to reduce prices, particularly in developing countries. The situation is serious for treatments that require multiple drugs owned by different firms with numerous patents, notably for HIV. I study the impact of the first joint licensing platform for drug bundling, the Medicines Patent Pool, on global drug diffusion and innovation. The pool allows generic firms worldwide to sublicense drug bundles cheaply and conveniently for sales in a set of developing countries. I construct a novel dataset from licensing contracts, public procurement, clinical trials, and drug approvals. Using difference-in-differences methods, I find robust evidence that the pool leads to a substantial increase in generic supply of drugs purchased. In addition, the branded-drug makers and other entities, such as public institutions, respond to the pool by increasing the number of new clinical trials. The R&D input increase is accompanied by increases in generic drug product approvals. Finally, I estimate a structural model to quantify welfare gains and simulate counterfactuals. The total benefit far to consumers and firms exceeds the associated costs.

Wang, Lucy Xiaolu (2020). Patent Classification Systems and Technological Categorization: An Overview and Data Update. DOI

• Patent classification systems and upper-level grouping datasets have been widely used for research and entrepreneurial purposes but are insufficiently documented. This article provides an overview of the major patent classification systems and the basic ideas behind categorization of the data on patent classes. I highlight recent institutional changes that disproportionately affect patents in specific categories and alternative categorizations used in the patent examination process. Finally, I update the National Bureau of Economic Research patent technological categorization based on the latest U.S. patent classification. The resulting datasets can be used in numerous follow-up analyses using patent data to investigate innovation and entrepreneurship.

Epstein, Jordan; Nicholson, Sean; Wang, Lucy Xiaolu; Hempstead, Katherine; Asin, Sam (2020). The Secret Menu in Health Care: A Cash Market for Imaging in California, Working Paper.

• Funded by a Robert Wood Johnson Foundation Grant awarded in 2016 (Principal Investigator: J. Epstein)
• In addition to the prices they negotiate with private health insurers, most providers also have a cash price schedule for patients who have the wherewithal to ask and are willing to pay in full when they receive a service. This is the first study to our knowledge that estimates the potential benefits of allowing privately-insured consumers to observe both in-network negotiated prices and cash prices, which is of particular interest given the growing importance of high-deductible health plans. Using data from five private health insurers and 142 imaging facilities in the San Francisco Bay Area, we estimate that patients could save between 10 percent and 22 percent of their insurer’s in-network price by paying cash. Potential savings are much larger (between 45 percent and 64 percent of their insurer’s in-network price) if consumers observe both cash and in-network prices and select the facility in the region offering the lowest price for a particular service.

Cassidy, Alecia W.; Tower, Edward; Wang, Lucy Xiaolu (2016). Manufacturing Fetishism: The Neo-Mercantilist Preoccupation with Protecting Manufacturing, Economic Research Initiatives at Duke (ERID) Working Paper, No. 227.

• Two common views are that a country cannot develop without a strong manufacturing base and that trade restrictions are essential to facilitate the development of that strong manufacturing base and thus spur economic growth. We ask:
  Does a strong manufacturing share of GDP facilitate economic growth?
  Do trade restrictions ensure the development of a strong manufacturing base?
  How can governance affect manufacturing share?
  And are the relationships we find robust across regions?
  We find the manufacturing share is not significantly correlated with a higher standard of living. Nor is it related significantly and consistently to economic growth. We also find that trade restrictions both at home and abroad shrink the manufacturing base and smother economic growth. A better way than protectionism and subsidies specific to industry to enhance economic growth is to improve governance effectiveness and the quality of regulation.
• Available at SSRN
• Also published in: The Region and Trade, pp. 137-175 (2015)