Journal of health economics
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The research and development costs of 68 randomly selected new drugs were obtained from a survey of 10 pharmaceutical firms. These data were used to estimate the average pre-tax cost of new drug development. ⋯ Capitalizing out-of-pocket costs to the point of marketing approval at a real discount rate of 11% yields a total pre-approval cost estimate of 802 million US dollars (2000 dollars). When compared to the results of an earlier study with a similar methodology, total capitalized costs were shown to have increased at an annual rate of 7.4% above general price inflation.
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Previous research suggests that "direct" reforms to the liability system-reforms designed to reduce the level of compensation to potential claimants-reduce medical expenditures without important consequences for patient health outcomes. We extend this research by identifying the mechanisms through which reforms affect the behavior of health care providers. ⋯ In addition, we find that "malpractice pressure" has a more significant impact on diagnostic rather than therapeutic treatment decisions. Our results provide an empirical foundation for simulating the effects of untried malpractice reforms on health care expenditures and outcomes, based on their predicted effects on the malpractice pressure facing medical providers.
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Cost-benefit analysis (CBA) is a recognised as the economic evaluation technique that accords most with the underlying principles of standard welfare economic theory. However, due to problems associated with the technique, economists evaluating resources allocation decisions in health care have most often used cost-effective analysis (CEA), in which health benefits are expressed in non-monetary units. ⋯ We develop an impossibility theorem that shows it is not possible to link CBA and CEA if: (i) the axioms of expected utility theory hold; (ii) the quality-adjusted life-year (QALY) model is valid in a welfare economic sense; and (iii) illness affects the ability to enjoy consumption. We conclude that, within a welfare economic framework, it would be unwise to rely on a link between CBA and CEA in economic evaluations.
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Comparative Study
The demand for elective surgery in a public system: time and money prices in the UK National Health Service.
We construct a model of the admission process for patients from general practices for elective surgery in the UK National Health Service. Public patients face a positive waiting time, but a zero money price. ⋯ Admission rates are negatively related to waiting times and distance to hospital. Practices respond to financial incentives as predicted by the model: fundholding practices have lower admission rates than non-fundholders and respond differently to changes in waiting times and patient characteristics.
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It is estimated that each HIV-positive child in South Africa costs the government more in terms of health and welfare expenses than it does to reduce mother-to-child transmission (MTCT) of HIV through the use of antiretroviral regimens (where the mother continues to breast-feed). Programmes to reduce MTCT of HIV/AIDS are, thus, clearly affordable. Using Nevirapine (according to the HIVNET 012 Protocol) saves more lives and [corrected] is more cost-effective than using Zidovudine (CDC 2 weeks regime).