Clinical Trials: the Effects of Registries and Results Databases∗

We analyze the incentives of pharmaceutical firms to generate scientific knowledge through clinical trials and how these incentives are affected through different regulatory environments. We propose a formal model of a pharmaceutical firm’s investment in clinical trials. Our model can explain why voluntary trial registries could not solve the problem of selective reporting of trial results. We show that compulsory trial registers reduce the incentives to invest in trials. Our model predicts that, instead of registries, the implementation of a system of voluntary results databases can be a much more successful regulatory tool: (i) it can avoid the problem of selective reporting of clinical trial outcomes and (ii) it increases the incentives of the firms to invest in clinical trials. Finally, our results highlight the importance of the conditions of product market competition on the incentives to perform clinical trials and, thus, on the success of the regulations