Externalities from Medical Innovation: Evidence from Organ Transplantation

Kevin Callison, Michael Darden and Keith Teltser

No 31673, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We evaluate the introduction of direct-acting antiviral (DAA) therapy for Hepatitis C (HCV) on liver transplant allocation in the United States. We develop a model of listing and organ acceptance behavior for patients with both HCV-positive and HCV-negative end-stage liver disease. In the model, DAAs obviate the need for transplant for some HCV-positive patients, which shortens the waiting list, potentially benefiting HCV-negative registrants and inducing marginal HCV-negative patients to list. Using data from the universe of transplants between 2005 and 2019, we find that DAA availability resulted in an additional 5,682 liver transplants to HCV-negative recipients between 2014 and 2019, driven in part by a 37% average annual increase in HCV-negative waiting list registrations. Our estimates imply that DAAs generated $7.52 billion in positive externalities for HCV-negative patients during this period.

JEL-codes: I10 I11 I14 O3 (search for similar items in EconPapers)
Date: 2023-09
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