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Measuring the Gains from Medical Research

An Economic Approach

In 1998, health expenditures in the United States accounted for 12.9% of national income-the highest share of income devoted to health in the developed world. The United States also spends more on medical research than any other country-in 2000, the federal government dedicated $18.4 billion to it, compared with only $3.7 billion for the entire European Union. In this book, leading health economists ask whether we are getting our money’s worth.

From an economic perspective, they find, the answer is a resounding "yes": in fact, considering the extraordinary value of improvements to health, we may even be spending too little on medical research. The evidence these papers present and the conclusions they reach are both surprising and convincing: that growth in longevity since 1950 has been as valuable as growth in all other forms of consumption combined; that medical advances producing 10% reductions in mortality from cancer and heart disease alone would add roughly $10 trillion-a year’s GDP-to the national wealth; or that the average new drug approved by the FDA yields benefits worth many times its cost of development.

The papers in this book are packed with these and many other surprising revelations, their sophisticated analysis persuasively demonstrating the massive economic benefits we can gain from investments in medical research. For anyone concerned about the cost and the value of such research-from policy makers to health care professionals and economists-this will be a landmark book.

240 pages | 37 line drawings, 36 tables | 6 x 9 | © 2003

Economics and Business: Health Economics


Table of Contents

Kevin M. Murphy and Robert H. Topel
1. The Health of Nations: The Contribution of Improved
Health to Living Standards
William D. Nordhaus
2. The Economic Value of Medical Research
Kevin M. Murphy and Robert H. Topel
3. Pharmaceutical Innovation, Mortality Reduction, and
Economic Growth
Frank R. Lichtenberg
4. The Return to Biomedical Research: Treatment and
Behavioral Effects
David M. Cutler and Srikanth Kadiyala
5. Biomedical Research and Then Some: The Causes of
Technological Change in Heart Attack Treatment
Paul Heidenreich and Mark McClellan
6. Can Medical Cost-Effectiveness Analysis Identify the
Value of Research?
David Meltzer
Author Index
Subject Index

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