Introduction to Danielle Li’s Research
Pharmaceutical companies have made significant advances in recent years, but could they be making even more? According to Danielle Li, an associate professor of economics at the MIT Sloan School of Management, the answer is yes. However, this would require the industry to change some of its core habits.
The Risk-Averse Nature of Big Pharma
Li’s research, along with economists Joshua Krieger and Dimitris Papalikolaou, found that big pharma firms are risk-averse. They tend to wait until they are in a good financial position before pursuing new and innovative projects. This approach can limit the potential for breakthroughs and advancements in the field.
The Impact of Insurance Policies on Drug Development
Another study by Li, in collaboration with Leila Agha and Soomi Kim, examined the effect of a 2012 shift in insurance policies on drug development. The results showed that firms spent less money on developing drugs in areas that were potentially affected by the policy change. This highlights the need for policymakers to consider the potential consequences of their decisions on the pharmaceutical industry.
The Role of Regulators in Drug Approval
Li’s research also explored the role of regulators in the drug approval process. In a paper with Lauren Cohen and Umit G. Gurun, she found that drug approvals tend to increase at the end of months, holidays, and in December. This suggests that regulators are meeting internal productivity targets, which can have unfortunate effects, such as drugs being approved with more adverse effects.
Li’s Approach to Research
Li’s studies are heavily empirical and focus on illuminating cause and effect. She believes that by analyzing data, she can gain insights into the world and understand how things work. As she puts it, "Some people learn about the world by talking to people. I learn about the world by looking at the data debris people leave as they move through the world."
The Connection Between Li’s Research Topics
Although Li’s research topics may seem distinct, she sees them as connected. Whether it’s drug development, people, or organizations, she is interested in how we evaluate opportunities and ideas. She explains, "When people think about which projects to fund, or which people to promote, or hire, fundamentally they’re trying to imagine a world that’s not this one. They’re trying to form counterfactuals. I’m interested in the act of organizational imagination, trying to collectively decide on the future."
Li’s Background and Education
Li grew up in New Hampshire and earned her undergraduate degree from Harvard University in 2005, majoring in mathematics and the history of science. She took a development economics course at MIT, which sparked her interest in the field. She then worked at MIT’s Abdul Latif Jameel Poverty Action Lab (J-PAL) and later earned her PhD in economics from MIT.
Li’s Current Research and Future Directions
Li is currently working on several studies, including one that examines gender biases in hiring practices. She finds that firms tend to rate employees based on subjective assessments of "potential," which can lead to biases against women. Li believes that by examining these biases and using data to inform decision-making, firms can make better choices and improve their overall performance.
Conclusion
Li’s research highlights the potential for improvement in the pharmaceutical industry and beyond. By examining the data and challenging assumptions, organizations can make better decisions and improve their outcomes. As Li concludes, "I’m interested in changing policy. I would like some of my work to say to people, ‘This works better.’" Her research offers valuable insights for policymakers, industry leaders, and anyone interested in improving the way organizations make decisions.
