Wesley Yin

Market incentives and pharmaceutical innovation

I study the impact of the Orphan Drug Act (ODA), which established tax incentives for rare disease drug development. I examine the flow of new clinical drug trials for a large set of rare diseases. Among more prevalent rare diseases, the ODA led to a significant and sustained increase in new trials. The impact for less prevalent rare diseases was limited to an increase in the stock of drugs. Tax credits can stimulate R & D; yet because they leave revenue margins unaffected, tax credits appear to have a more limited impact on private innovation in markets with smaller revenue potential.

Valuing health technologies at nice: recommendations for improved incorporation of treatment value in HTA

Pricing, reimbursements and coverage decisions for medical innovations and services are complex. In many countries, valuing medical technologies is the responsibility of national health-care systems that strive for distributive efficiency under fiscal constraints on medical spending. In the UK, the National Institute for Health and Clinical Excellence (NICE) is charged with the difficult task of assessing new and existing medical technologies, and making recommendations that guide NHS coverage decisions. These are responsibilities that NICE carries out rigorously and with the objective of achieving efficiency in the allocation of NHS resources. Nevertheless, the current process of health technology appraisal (HTA) has been criticized for failure to systematically incorporate important sources of value from new innovations. In maintaining NICE’s current approach to HTA, the UK risks suboptimal patient outcomes and social welfare relative to what could be achieved if limited NHS resources were targeted toward those technologies with greatest social value. Perhaps recognizing these limitations, NICE commissioned Professor Sir Ian Kennedy in January, 2009, to carry out a study of valuing innovation aimed at addressing the approach that should be adopted by NICE to ensure that innovation is properly taken into account when establishing the value of new health technologies; whether particular forms of value be considered more important than others; how should innovation in health technologies be defined and understanding the relationship between innovation and value. As part of this process, we were asked to present our views on what such new approaches may be and how they could be implemented in practice within the NICE regulatory framework. This work was presented to the Kennedy Commission on May 19, 2009. We discuss these approaches below, and expand on ways in which important value dimensions can be integrated within the current framework. While framed in response to the Kennedy study, these views are broadly applicable to other health-care systems charged with valuing innovation and achieving distributive efficiency.

Insurers’ Negotiating Leverage and the External Effects of Medicare Part D

By influencing the size and bargaining power of private insurers, public subsidization of private health insurance may project effects beyond the subsidized population. We test for such spillovers by analyzing how increases in insurer size resulting from the implementation of Medicare Part D affected drug prices negotiated in the non-Medicare commercial market. On average, Part D lowered prices for commercial enrollees by 3.7 percentage. The external commercial market savings amount to

Household Decision Making and Savings Impacts: Further Evidence from a Commitment Savings Product in the Philippines

1.5 billion per year, which, if passed to consumers, approximates the internal cost savings of newly insured subsidized beneficiaries. If retained by insurers, it corresponds to a greater than 9.25 percentage average increase in profitability on stand-alone drug insurance.

Environmental Regulation and Industrial Performance: Evidence from Unexpected Externalities in China

Commitment devices for savings could benefit those with self-control as well as familial or spousal control issues. We find evidence to support both motivations. We examine the impact of a commitment savings product in the Philippines on household decision making power and self-perception of savings behavior, as well as actual savings. The product leads to more decision making power in the household for women, and likewise more purchases of female-oriented durable goods. We also find that the product leads women who appear time-inconsistent in a baseline survey to self-report being a disciplined saver in the follow-up survey. For impact on savings balances, we find that the 81% increase in savings after one year did not crowd out savings held outside of the participating bank, but that the longer-term impact over two and a half years on bank savings dissipated to only a 33% increase, which is no longer statistically significant. We discuss reasons why the effect dissipated and the implications for designing and implementing sustainable, equilibrium-shifting interventions.

Association Between Breast Cancer Disease Progression and Workplace Productivity in the United States

The neoclassical model argues that environmental regulations impede industrial performance. In this paper, we shed light on two features of environmental regulations in developing countries that have received little attention and that give rise to unexpected outcomes with respect to industry performance. First, compliance to regulations is likely to provide positive forces leading to improved productivity because a) induced innovation and/or the adoption of cleaner technologies among polluting firms enhance industrial activities, and b) regulations stimulate market dynamics through the entry of more efficient firms and the exit of less efficient ones. Second, regulations carry externality effects for non-polluting energy-intensive firms, when the energy sector is prone to regulations. By exploiting plausibly exogenous variation in regulatory stringency generated by the Two Control Zone policy in China across cities and across industries, we find evidence that pollution-intensive firms substantially improved economic performance, whereas energy-intensive firms received negative externalities. The findings are robust to the inclusions of city-specific trends, industry-specific trends, and key ex ante determinants of firm growth.

The Market for High-Quality Medicine: Retail Chain Entry and Drug Quality in India

Objective: Determine workplace productivity losses attributable to breast cancer progression. Methods: Longitudinal analysis linking 2005 to 2012 medical and pharmacy claims and workplace absence data in the US patients were commercially insured women aged 18 to 64 diagnosed with breast cancer. Productivity was measured as employment status and total quarterly workplace hours missed, and valued using average US wages. Results: Six thousand four hundred and nine women were included. Breast cancer progression was associated with a lower probability of employment (hazard ratio [HR] = 0.65, P < 0.01) and increased workplace hours missed. The annual value of missed work was

MD7 DIFFERENTIALTAKE-UP OFTHE MEDICARE PART D PRESCRIPTION DRUG BENEFIT

24,166 for non-metastatic and

Solutions and Challenges to Curing Global Health Inequality (Innovations Case Discussion: The Institute for OneWorld Health)

30,666 for metastatic patients. Thus, progression to metastatic disease is associated with an additional

Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines

6500 in lost work time (P < 0.05), or 14% of average US wages. Conclusions: Breast cancer progression leads to diminished likelihood of employment, increased workplace hours missed, and increased cost burden.