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Price Indices and the Value of Innovation with Heterogenous Patients / Claudio Lucarelli, Sean Nicholson, Nicholas Tilipman.
- Format:
- Book
- Author/Creator:
- Lucarelli, Claudio.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w28333.
- NBER working paper series no. w28333
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2021.
- Summary:
- Many countries use uniform cost-effectiveness criteria to determine whether to adopt a new medical technology for the entire population. This approach assumes homogeneous preferences for expected health benefits and side effects. We examine whether new prescription drugs generate welfare gains when accounting for heterogeneous preferences by constructing quality- adjusted price indices for colorectal cancer drug treatments. We find that while the efficacy gains from newer drugs do not justify high prices for the population as a whole, innovation improves the welfare of sicker, late-stage cancer patients. A uniform evaluation criterion would not permit these innovations despite welfare gains to a subpopulation.
- Notes:
- Print version record
- January 2021.
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