TY  - JOUR
AU  - Bhattacharya,Jay
AU  - Packalen,Mikko
TI  - Is Medicine an Ivory Tower? Induced Innovation, Technological Opportunity, and For-Profit vs. Non-Profit Innovation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13862
PY  - 2008
Y2  - March 2008
UR  - http://www.nber.org/papers/w13862
L1  - http://www.nber.org/papers/w13862.pdf
N1  - Author contact info:
Jay Bhattacharya
117 Encina Commons
Center for Primary Care
and Outcomes Research
Stanford University
Stanford, CA  94305-6019
Tel: 650/736-0404
Fax: 650/723-1919
E-Mail: jay@stanford.edu

Mikko Packalen
University of Waterloo
Department of Economics
200 University Avenue West
Waterloo, ON N2L 3G1
Canada
E-Mail: packalen@uwaterloo.ca
AB  - This paper examines whether the composition of medical research responds to changes in disease incidence and research opportunities. The paper also provides new evidence on induced pharmaceutical innovation. In both cases we use the change in the demographic structure of the market (measured by age structure and obesity prevalence) to test the induced innovation hypothesis. Technological opportunity is calculated from estimates of structural productivity parameters. The extent of inventive activity is measured from the MEDLINE database on 16 million biomedical publications. We match these data with data on disease incidence. We show that medical research responds to changes in disease incidence and research opportunities. We also find that pharmaceutical innovation responds to aging- and obesity-induced changes in potential market size.
ER  -