Price Indexes for Clinical Trial Research: A Feasibility Study / Ernst R. Berndt, Iain M. Cockburn.

Format:

Book

Author/Creator:

Berndt, Ernst R.

Contributor:

National Bureau of Economic Research.

Cockburn, Iain M.

Series:

Working Paper Series (National Bureau of Economic Research) no. w18918.

NBER working paper series no. w18918

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2013.

Summary:

We estimate hedonic price indexes for clinical trial research, an important component of biomedical R&D, using a large sample of agreements between trial sponsors and clinical investigators obtained from Medidata Solutions Worldwide Inc. Nominal prices measured as total grant cost per patient rose by a factor of 4.5 between 1989 and 2011, while the NIH Biomedical R&D Price Index (BRDPI) focused on input costs rose only 2.2-fold. Most of the disparity appears to be attributable to changes in the nature and organization of clinical trials: during this period the average number of patients per site fell substantially while "site work effort" more than doubled. After controlling for these changes in the characteristics of investigator agreements using a variety of methods based on hedonic regressions, we find that the estimated rate of inflation in clinical trials costs tracks the BDRPI very closely. Results from this study suggest that it should be feasible for statistical agencies to develop a producer price index for this type of R&D activity, contributing to broader efforts to develop a deflator for contracted R&D services.

Notes:

Print version record

March 2013.