Pharmaceutical Innovation

The pharmaceutical industry worldwide is a rapidly burgeoning industry contributing to growth of gross domestic product and employment. Technological change in this field has been very rapid, with many new products being introduced. For this reason in part, health care budgets throughout the world have increased dramatically, eliciting growing pressures for cost containment. This book explores four important issues in pharmaceutical innovations: (1) the industry structure of pharmaceutical innovation; (2) incentives for correcting market failures in allocating resources for research and development; (3) competition and marketing; and (4) public evaluation of the benefits and costs of innovation. The lessons are applicable to countries all over the world, at all levels of economic development. By discussing existing evidence this book proposes incentive arrangements to accomplish social objectives.

"The second section (chapters 4-7) provides the real meat of the book. The authors do an outstanding job of making a compelling case for formulating incentives for innovation based on societal needs." - JAMA

Frank Sloan has been the J. Alexander McMahon Professor of Health Policy and Management and Professor of Economics at Duke University since 1993, where he holds faculty appointments in the Department of Economics, the School of Public Policy, the Fuqua School of Business, and the School of Nursing. Before joining the faculty at Duke, he was a research economist at the Rand Corporation and served on the faculties of the University of Florida and Vanderbilt University. His current research interests include alcohol use and smoking prevention, long-term care, medical malpractice, and cost-effectiveness analyses of medical technologies. Professor Sloan also has a long-standing interest in hospitals, health care financing, and health manpower. He has served on several national advisory public and private groups, including the Physician Payment Review Commission. He has been a member of the Institute of Medicine of the National Academy of Sciences since 1982, recently chairing IOM committees on vaccine financing and cancer in low- and middle-income countries. He recently received a Merit Award from the National Institutes of Health and an Investigator Award from the Robert Wood Johnson Foundation. Professor Sloan's most recent books include The Smoking Puzzle: Information, Risk Perceptions, and Choice (2003) with Drs V. Kerry Smith and Donald H. Taylor, Jr., and The Price of Smoking with Drs Jan Ostermann, Gabriel Picone, Christopher Conover, and Donald H. Taylor, Jr. (2004). Professor Sloan received his Ph.D. in economics from Harvard University in 1969. Chee-Ruey Hsieh is a Research Fellow in the Institute of Economics at Academia Sinica, Taipei, Taiwan. He received his Ph.D. in economics from Vanderbilt University in 1990. Dr Hsieh has a long-standing interest in health economics and health policy. He is the coeditor of two other books: The Economic Analysis of Substance Use and Abuse, and The Economics of Health Care in Asia-Pacific Countries.