Who Benefits from New Medical Technologies? Estimates of Consumer and Producer Surpluses for HIV/AIDS Drugs

Tomas Philipson and Anupam Jena

No 11810, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The social value of an innovation is comprised of the value to consumers and the value to innovators. We estimate that for the HIV/AIDS therapies that entered the market from the late 1980's onwards, innovators appropriated only 5% of the social surplus arising from these new technologies. Despite the high annual costs of these drugs to patients, the low share of social surplus going to innovators raises concerns about advocating cost-effectiveness criteria that would further reduce this share, and hence further reduce incentives for innovation.

JEL-codes: I1 (search for similar items in EconPapers)
Date: 2005-12
New Economics Papers: this item is included in nep-afr, nep-hea and nep-ino
Note: EH PR
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Citations: View citations in EconPapers (7)

Published as Tomas Philipson & Anupam Jena, 2006. "Who Benefits from New Medical Technologies? Estimates of Consumer and Producer Surpluses for HIV/AIDS Drugs," Forum for Health Economics & Policy, Berkeley Electronic Press, vol. 0(1), pages 1005-1005.

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