Duke 2008 | ASHE | Equity and Efficiency in Health and Healthcare

Much has been researched connecting the economics of pharmaceutical interventions to health outcomes. Past studies appearing in leading economics (QJE, Journal of Health Economics, Health Economics) and clinical medicine (NEJM, JAMA) outlets conclude that the FDA approved drugs are on average cost-effective for given indications. The solid case of heart attack drugs (published in QJE) is a hallmark finding with significant public (health) policy implications for investments in innovative treatment technologies. Assuming that such life-saving technologies extend life for five years there are additional benefits (further life extension) to patients from future technologies that may complement. Medical progress in the forms of human tissues, spinal implants, and related devices technologies, are less well studied. These technologies (human tissues, pharmaceuticals, implants) generally tend to be flexible, complementary, global, and have significant spillover effects defined across many dimensions.

More recently, the health economics of drugs, medical devices, and biotechnologies are increasingly important based on rapid increases in innovation, ageing population (loss of fine motor control skills, depreciating soma) in major industrial countries (Italy, Japan, the US), health hazardous occupational and living environments, and other factors. The US, accounting for more than 50 percent of the world market in medical devices, currently leads in the production and use of medical implants and devices. Japan and China follow. The industry's numbers equivalent is about 4 (Herfindahl is 0.25). Depending on specifics, the pharmaceutical industry structure ranges from monopoly and oligopoly to monopolistic competition. This suggests that the emerging human tissue and related innovations have strong growth potentials.

This session harnesses three papers on broad-based medical technologies to highlight their synergistic growth trajectories, health economic values, as well as social welfare impacts and public policy implications