This chapter considers how innovation policy and health law – including food and drug regulation, healthcare reimbursement, and direct R&D subsidies – have both encouraged and impeded the development and allocation of new technologies in the fight against COVID-19. First, an expansive diagnostic testing program for COVID-19 is critical both to slow the spread of the disease and to ensure that future outbreaks can be detected early. The disastrous US testing response represents both an individual regulatory failure and a failure of coordination among agencies including the Food and Drug Administration (FDA), Centers for Disease Control (CDC), and Centers for Medicare and Medicaid Services (CMS). On the treatment side, drugmakers have rushed to identify new and existing compounds for potential COVID-19 efficacy against the backdrop of potentially lengthy and expensive clinical trials. In response, the FDA has granted Emergency Use Authorizations for several of these drugs, which requires balancing risks and harms on only minimal evidence. The intersection between incentives and regulatory oversight has profoundly shaped the innovation landscape for new COVID-19 treatments, such as by permitting widespread use in ways that do not improve the evidence base about which therapeutics are most effective. Finally, extinguishing COVID-19 will require the development of a broadly effective vaccine. This is an opportunity to develop and implement novel ex post rewards, including reimbursement incentives per vaccination to promote vaccine uptake. Each of these areas reveals important lessons to help policymakers better prepare for the next pandemic.

Medical devices have historically been less regulated than their drug and biologic counterparts. A benefit of this less demanding regulatory regime is facilitating innovation by making new devices available to consumers in a timely fashion. Nevertheless, there is increasing concern that this approach raises serious public health and safety concerns. The Institute of Medicine in 2011 published a critique of the American pathway allowing moderate-risk devices to be brought to the market through the less-rigorous 501(k) pathway, flagging a need for increased postmarket review and surveillance. High-profile recalls of medical devices, such as vaginal mesh products, along with reports globally of nearly two million injuries and more than 80,000 deaths linked to faulty medical devices, have raised public health critiques regarding the oversight of these products. Should we follow the recommendation of the Institute of Medicine to reduce the use of the 510(k) pathway, and, if so, what should replace it? What would an ideal regulatory pathway, reflecting the twin goals of innovation and patient protection, look like in the twenty-first century? These questions are complicated by new tools and mechanisms that can be used to achieve our goals. For example, in an era of big data, where we have the capabilities to better follow postmarket incidents, what should postmarket review look like?