Lucy Xiaolu Wang
Assistant Professor of Resource Economics University of Massachusetts Amherst
- Amherst MA
Economics of innovation & digitization in health care markets, particularly in the biopharmaceutical & digital health industries.
University of Massachusetts Amherst
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Biography
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Education
CUFE, Beijing, China
B.A.
Economics
Duke University
M.A.
Economics
Cornell University
Ph.D.
Economics
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Pooled Buying Can Reduce Costs of Life-Saving Drugs, But Planning is Key
UMass Amherst online
2025-05-06
The UMass Amherst-led study finds that pooled procurement can reduce costs up to 20% for low- and middle-income countries.
UMass Health Economist Lucy Xiaolu Wang Finds Regulatory Transparency Curbs ‘Patent Gaming’ in Pharmaceuticals
UMass Amherst online
2025-06-30
Wang, assistant professor in the Department of Resource Economics, has published research in the July volume of the Journal of Public Economics detailing how greater regulatory transparency can serve as an effective check on patenting manipulation in the pharmaceutical industry, without stifling meaningful innovation.
Select Publications
The complementarity of drug monitoring programs and health IT for reducing opioid-related mortality and morbidity
Health EconomicsLucy Xiaolu Wang
2021-05-27
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.
Global drug diffusion and innovation with the medicines patent pool
Journal of Health EconomicsLucy Xiaolu Wang
2022-09-01
This paper studies the impact of the first joint licensing platform for patented drugs, the Medicines Patent Pool, 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 that the pool leads to substantial increases in the generic supply of drugs purchased, particularly in countries with stronger patent protection. In addition, there are some positive increases in clinical trials and drug product approvals after a compound enters the pool, mostly by firms outside the pool.
A Cost-Benefit Analysis of the Medicines Patent Pool
Economics BulletinLucy Xiaolu Wang
2023-09-30
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.
Procurement Institutions and Essential Drug Supply in Low and Middle-Income Countries
Journal of Health EconomicsLucy Xiaolu Wang, Nahim Bin Zahur
2025-05-01
International procurement institutions play an important role in drug supply. We study price, delivery, and procurement lead time of drug products for major infectious diseases (antiretrovirals, antimalarials, antituberculosis, and antibiotics) in 106 developing countries from 2007–2017 across procurement institution types. We find that pooled procurement lowers prices: pooling internationally is most effective for small buyers and concentrated markets, while pooling within-country is most effective for large buyers and unconcentrated markets. Pooling can reduce delays, but at the cost of longer anticipated procurement lead times. Finally, pooled procurement is more effective for older drugs, compared to patent pooling institutions that target newer drugs. Our findings are robust to alternative fixed effects specifications, instrumental variable estimation, selection-on-unobservables tests, and additional analyses accounting for heterogeneity in demand elasticities across buyers and interactions with major global health initiatives.
Marketing Authorization and Strategic Patenting: Evidence from Pharmaceuticals
Journal of Public EconomicsLucy Xiaolu Wang, Dennis Byrski
2025-07-01
Patents can incentivize innovation, but pharmaceutical firms often extend market exclusivity by patenting minor modifications to existing drugs, raising concerns about low-novelty patents that add little therapeutic value. This study examines how patenting behavior changes after marketing authorization, a regulatory milestone that makes clinical trial data public and thereby creates “prior art” that limits future patent claims. Using a novel European patent–drug dataset and event study methods, we exploit plausibly exogenous variation in the time from patent priority filing to marketing authorization. We find a significant decline in strategic patenting after authorization, particularly in secondary patents and those covering the same disease areas. In contrast, follow-on product patents and patents for new disease areas remain stable, suggesting that authorization selectively curbs low-novelty filings. Both originators and other firms respond similarly, though at different speeds. The absence of similar responses after earlier milestones indicates increased difficulty in obtaining or enforcing low-value patents as the likely mechanism. Robustness checks – including alternative difference-in-differences estimators, constant exclusivity samples, and analyses accounting for non-European market incentives, firm characteristics, and instrumental variable approaches – support our conclusions. Our findings show how regulatory data transparency can indirectly improve patent quality.
When developing countries band together, lifesaving drugs become cheaper and easier to buy − with trade-offs
The ConversationLucy Xiaolu Wang, Nahim Bin Zahur
2025-06-17
Procuring lifesaving drugs is a daunting challenge in many low- and middle-income countries. Essential treatments are often neither available nor affordable in these nations, even decades after the drugs entered the market.
Prospective buyers from these countries face a patent thicket, where a single drug may be covered by hundreds of patents. This makes it costly and legally difficult to secure licensing rights for manufacturing.
These buyers also face a complex and often fragile supply chain. Many major pharmaceutical firms have little incentive to sell their products in unprofitable markets. Quality assurance adds another layer of complexity, with substandard and counterfeit drugs widespread in many of these countries.
Some new drugs aren’t actually ‘new’ – pharmaceutical companies exploit patents and raise prices for patients, but data transparency can help protect innovation
The ConversationLucy Xiaolu Wang
2025-09-23
Pharmaceutical innovation saves lives. But not every “new” drug is truly new.
Patents are designed to reward breakthrough inventions by granting the inventors temporary monopoly rights to recoup the costs of research and development and to encourage future innovation. But firms may also exploit the system in ways that make drugs more expensive and less accessible to patients. A 2023 study found that 78% of drugs associated with new patents weren’t actually new drugs but minor modifications.
