The Impact of US Medical Product Regulatory Complexity on Innovation: Preliminary Evidence of Interdependence, Early Acceleration, and Subsequent Inversion

Abstract: Is the complexity of medical product (medicines and medical devices) regulation impacting innovation in the US? If so, how? Here, this question is investigated as follows: Various novel proxy metrics of regulation (FDA-issued guidelines) and innovation (corresponding FDA-registrations) from 1976-2020 are used to determine interdependence, a concept relying on strong correlation and reciprocal causality (estimated via variable lag transfer entropy and wavelet coherence). Based on this interdependence, a mapping of regulation onto innovation is conducted and finds that regulation seems to accelerate then supports innovation until on or around 2015; at which time, an inverted U-curve emerged. If empirically evidentiary, an important innovation-regulation nexus in the US has been reached; and, as such, stakeholders should (re)consider the complexity of the regulatory landscape to enhance US medical product innovation. Study limitations, extensions, and further thoughts complete this investigation.