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Health Economics & Policy 3 rd Edition James W. Henderson

Health Economics & Policy 3 rd Edition James W. Henderson. Chapter 13 Technology in Medicine. The Diffusion of New Technology. The economics of technological change Cost-increasing technological change Cost-decreasing technological change Levels of technology Non-technology

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Health Economics & Policy 3 rd Edition James W. Henderson

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  1. Health Economics & Policy3rd EditionJames W. Henderson Chapter 13 Technology in Medicine

  2. The Diffusion of New Technology • The economics of technological change • Cost-increasing technological change • Cost-decreasing technological change • Levels of technology • Non-technology • Halfway technology • High technology • Role of insurance in the diffusion of technology

  3. Effect of Technological Change on Cost

  4. High-cost Medicine • Heart disease • Angioplasty • CABGS • Heart transplantation • Infertility treatment • IUI • IVF • GIFT

  5. Organ Transplantation • History • Current policy • Market for organs • Supply and demand for organs • Property rights • U.S. policy—required request • Britain—contract in provision of organs • Rest of Europe—presumed consent

  6. Number of U.S. Transplants

  7. Cost of Transplant Surgery, 1990

  8. Market for Kidneys, 1998

  9. The Pharmaceutical Industry • Structure of the industry • Basic research – supported by NIH labs and grants • Applied research – looking to development of marketable drug • 284 new drug approvals from 1990-99, 265 originated from industry, 9 from government, and 10 from academia

  10. Risk in Development • DiMasi et al. (2003) examined 538 investigational drugs first tested in humans between 1983-94 • Approved for marketing (84) • Submitted to FDA, but not approved (9) • Submitted to FDA, but abandoned (5) • Human testing terminated < 4 years (227) • Human testing terminated > 4 years (172) • Human testing active 3/31/01 (43)

  11. R&D Process in Pharmaceuticals • Preclinical • Clinical • Phase I – health volunteers to study safety profile, including toxicity, absorption, etc. • Phase II – controlled placebo studies looking at efficacy and safety • Phase III – large scale testing looking at effectiveness and safety • Animal testing – long-term toxicity experiments during clinical phase • FDA review

  12. Steps in Pharmaceutical R&D

  13. Regulating Drug Prices • The economics of drug pricing • Price controls in the U.S. and abroad • Danzon (1996) • Role of generics • Impact of price controls on new drug development

  14. Research v. Promotion

  15. Summary and Conclusions • Technological imperative • Future of biotechnology

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