The State of Research on Medical Innovations
Medical innovations have meaningfully increased the quality and quantity of life around the globe. The pace of innovation is determined, in part, by the economic and regulatory environment, and findings from economic research can help inform policy in this area. In this paper we describe the state of existing research and future research opportunities in the economics of medical innovation. We focus on three broad economic questions: 1) How does regulation affect innovative effort? 2) How does profit potential affects the supply of innovation effort; and 3), Do the returns from innovation justify the high costs? We identify potential obstacles to progress in available data and methods. We further discuss the relatively neglected area of procedure innovation, for which there are major hurdles in terms of identifying innovative activity and understanding the process by which innovations reach the market.
David Dranove, Craig Garthwaite
Dranove, David, and Craig Garthwaite. 2021. The State of Research on Medical Innovations.