TY  - JOUR
AU  - Blume-Kohout,Margaret E.
AU  - Sood,Neeraj
TI  - The Impact of Medicare Part D on Pharmaceutical R&D
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13857
PY  - 2008
Y2  - March 2008
UR  - http://www.nber.org/papers/w13857
L1  - http://www.nber.org/papers/w13857.pdf
N1  - Author contact info:
Margaret E. Blume-Kohout
Department of Economics
and RWJF Center for Health Policy
University of New Mexico
E-Mail: megbk@unm.edu

Neeraj Sood
Schaeffer Center for Health Policy and Economics
3335 S. Figueroa Street, Unit A
Los Angeles, CA 90089-7273
Tel: 310/393-0411
Fax: 310/260-8156
E-Mail: nsood@healthpolicy.usc.edu
AB  - 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.
ER  -