1. Health Economics & Policy 2 nd Edition James W. Henderson Chapter 12 Technology in Medicine Copyright 2002, South-Western, a division of Thomson Learning, James W. Henderson, Health Economics and Policy, 2e

2. The Diffusion of New Technology l The economics of technological change –Cost-increasing technological change –Cost-decreasing technological change l Levels of technology –Non-technology –Halfway technology –High technology l Role of insurance in the diffusion of technology

3. High-cost Medicine l Heart disease –Angioplasty –CABGS –Heart transplantation l Infertility treatment –IUI –IVF –GIFT

4. Organ Transplantation l History l Current policy l Market for organs –Supply and demand for organs –Property rights l U.S. policy—required request l Britain—contract in provision of organs l Rest of Europe—presumed consent

5. Number of U.S. Transplants

6. Cost of Transplant Surgery, 1990

7. The Pharmaceutical Industry l Structure of the industry –Basic research –Applied research l R&D process in pharmaceuticals –Preclinical –3 phases of human testing –FDA review –Animal testing

8. Steps in Pharmaceutical R&D

9. Regulating Drug Prices l The economics of drug pricing l Price controls in the U.S. and abroad –Danzon (1996) –Role of generics l Impact of price controls on new drug development

10. Summary and Conclusions l Technological imperative l Future of biotechnology