Excerpt

When Is Prevention More Profitable than Cure? The Impact of Time-Varying Consumer Heterogeneity. Michael Kremer, January 2013, Paper. "We argue that in pharmaceutical markets, variation in the arrival time of consumer heterogeneity creates differences between a producer's ability to extract consumer surplus with preventives and treatments, potentially distorting R&D decisions. If consumers vary only in disease risk, revenue from treatments---sold after the disease is contracted, when disease risk is no longer a source of private information---always exceeds revenue from preventives..." Link Verified October 13, 2014