Work

The Impact of Medicare Part D on Pharmaceutical R&D

Year: 2008

Type: report

Abstract: Recent evidence suggests that Medicare Part D has increased prescription drug use among the elderly, and earlier studies have indicated that increasing market size induces pharmaceutical innovation.This paper assesses the impact of Medicare Part D on pharmaceutical research and development (R&D), using time-series data on (a) the number of drugs in clinical development by therapeutic class, and (b) R&D expenditures by firm.We demonstrate that the passage of Medicare Part D was associated with significantly higher pharmaceutical R&D for drug classes with higher Medicare market share, and for firms specializing in higher-Medicare-share drugs.

Source: National Bureau of Economic Research

DOI: 10.3386/w13857

Authors: Margaret Blume-Kohout, Neeraj Sood

Institutions: RAND Corporation, National Bureau of Economic Research, RAND School of Public Policy

Language: English

Topic: Pharmaceutical Economics and Policy

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Good health and well-being

Open Access status: green

Funder: National Institute on Aging