OUPrNCORRECTED PROOF — FIRST—PROOF, 01/28/12, NEWGEN
`
`
`
`
`\J
`
`THE OXFORD HANDBOOK OF
`
`THE ECONOMICS
`
`OF THE
`
`BIOPHARMACEUTICAL
`
`INDUSTRY
`
`@
`
`1/28/2012 6:35:59PM ‘
`ALCON 2109
`
`Argentum Pharm. LLC V. Alcon Research, Ltd.
`Case IPR2017-01053
`
`

`

`OUP UNCORRECTED PROOF – FIRST-PROOF, 01/28/12, NEWGEN
`
`Consulting Editors
`
`Michael Szenberg
`Lubin School of Business, Pace University
`
`Lall Ramrattan
`University of California, Berkeley Extension
`
`
`
`00_Danzon_Prelims.indd ii00_Danzon_Prelims.indd ii
`
`
`
`1/28/2012 6:36:01 PM1/28/2012 6:36:01 PM
`
`

`

`OUP UNCORRECTED PROOF – FIRST-PROOF, 01/28/12, NEWGEN
`
`The Oxford Handbook of
`
`THE ECONOMICS
`OF THE
`BIOPHARMACEUTICAL
`INDUSTRY
`
`Edited by
`PATRICIA M. DANZON
`AND
`SEAN NICHOLSON
`
`1
`
`
`
`00_Danzon_Prelims.indd iii00_Danzon_Prelims.indd iii
`
`
`
`1/28/2012 6:36:01 PM1/28/2012 6:36:01 PM
`
`

`

`OUP UNCORRECTED PROOF – FIRST-PROOF, 01/28/12, NEWGEN
`
` 1
`Oxford University Press, Inc., publishes works that further
`Oxford University’s objective of excellence
`in research, scholarship, and education.
`Oxford New York
`Auckland Cape Town Dar es Salaam Hong Kong Karachi
`Kuala Lumpur Madrid Melbourne Mexico City Nairobi
`New Delhi Shanghai Taipei Toronto
`With offices in
`Argentina Austria Brazil Chile Czech Republic France Greece
`Guatemala Hungary
`Italy
`Japan Poland Portugal Singapore
`South Korea Switzerland Thailand Turkey Ukraine Vietnam
`Copyright © 2012 by Oxford University Press
`Published by Oxford University Press, Inc.
`198 Madison Avenue, New York, New York 10016
`www.oup.com
`Oxford is a registered trademark of Oxford University Press
`All rights reserved. No part of this publication may be reproduced,
`stored in a retrieval system, or transmitted, in any form or by any means,
`electronic, mechanical, photocopying, recording, or otherwise,
`without the prior permission of Oxford University Press.
`Library of Congress Cataloging-in-Publication Data
`The Oxford handbook of the economics of the biopharmaceutical industry /
`edited by Patricia M. Danzon and Sean Nicholson.
`p. cm.
`Includes bibliographical references and indexes.
`ISBN 978-0-19-974299-8 (cloth : alk. paper)
`1. Pharmaceutical industry.
`2. Biopharmaceutics—Economic aspects.
`I. Danzon, Patricia Munch, 1946–
`II. Nicholson, Sean.
`III. Title: Economics of the biopharmaceutical industry.
`HD9665.5.O94 2012
`338.4′76157—dc23
`2011040815
`
`1 3 5 7 9 8 6 4 2
`Printed in the United States of America
`on acid-free paper
`
`
`
`00_Danzon_Prelims.indd iv00_Danzon_Prelims.indd iv
`
`
`
`1/28/2012 6:36:01 PM1/28/2012 6:36:01 PM
`
`

`

`OUP UNCORRECTED PROOF – FIRST-PROOF, 01/28/12, NEWGEN
`
`Contents
`
` Contributors
`
`1. Introduction
`Patricia M. Danzon and Sean Nicholson
`
`PART I PHARMACEUTICAL INNOVATION
`2. R&D Costs and Returns to New Drug Development:
`A Review of the Evidence
`Joseph A. DiMasi and Henry G. Grabowski
`3. Financing Research and Development
`Sean Nicholson
`4. Cost of Capital for Pharmaceutical, Biotechnology,
`and Medical Device Firms
`Scott E. Harrington
`5. The Regulation of Medical Products
`Anup Malani and Tomas Philipson
`6. Incentives to Innovate
`Darius Lakdawalla and Neeraj Sood
`7. Patents and Regulatory Exclusivity
`Rebecca S. Eisenberg
`
`PART II THE MARKET FOR PHARMACEUTICALS
`8. Pricing and Reimbursement in US Pharmaceutical Markets
`Ernst R. Berndt and Joseph P. Newhouse
`9. Regulation of Price and Reimbursement for Pharmaceuticals
`Patricia M. Danzon
`
`vii
`
`1
`
`21
`
`47
`
`75
`
`100
`
`143
`
`167
`
`201
`
`266
`
`
`
`00_Danzon_Prelims.indd v00_Danzon_Prelims.indd v
`
`
`
`1/28/2012 6:36:01 PM1/28/2012 6:36:01 PM
`
`

`

`OUP UNCORRECTED PROOF – FIRST-PROOF, 01/28/12, NEWGEN
`
`vi
`
`contents
`
`10. Drugs and Vaccines for Developing Countries
`Adrian Towse, Eric Keuffel, Hannah E. Kettler,
`and David B. Ridley
`11. Insurance and Drug Spending
`Mark V. Pauly
`12. Consumer Demand and Health Effects of Cost Sharing
`Dana P. Goldman and Geoffrey F. Joyce
`13. Measuring Value: Pharmacoeconomics Theory and Practice
`Adrian Towse, Michael Drummond,
`and Corinna Sorenson
`14. Price Indexes for Prescription Drugs: A Review of the Issues
`Ana Aizcorbe and Nicole Nestoriak
`15. Empirical Evidence on the Value of Pharmaceuticals
`Craig Garthwaite and Mark Duggan
`16. Promotion to Physicians and Consumers
`Don Kenkel and Alan Mathios
`17. The Economics of Vaccines
`Frank A. Sloan
`18. Mergers, Acquisitions, and Alliances
`Henry Grabowski and Margaret Kyle
`
`Index
`
`302
`
`336
`
`365
`
`394
`
`438
`
`463
`
`493
`
`524
`
`552
`
`579
`
`
`
`00_Danzon_Prelims.indd vi00_Danzon_Prelims.indd vi
`
`
`
`1/28/2012 6:36:01 PM1/28/2012 6:36:01 PM
`
`

`

`OUP UNCORRECTED PROOF – FIRST-PROOF, 01/28/12, NEWGEN
`
`Contributors
`
`Ana Aizcorbe is Chief Economist of the Bureau of Economic Analysis for the US
`Department of Commerce. She is primarily responsible for coordinating cross-
`program research projects and initiatives to provide supplemental measures in sat-
`ellite accounts. She also acts as a liaison to the academic community. Before joining
`the BEA in 2003, Dr. Aizcorbe was at the Federal Reserve Board where she con-
`ducted research in support of the board’s industrial production index and Survey
`of Consumer Finances. She has written numerous articles on theoretical issues
`underlying price measurement, with empirical applications to the high-technology
`and service sectors. She received her PhD in economics from Boston College.
`Ernst R. Berndt is Louis E. Seley Professor in Applied Economics at the MIT Sloan
`School of Management. The focus of his recent research is on the changing dynam-
`ics of the health care industries. He has examined how medical innovations affect
`the costs of treating selected diseases over time, factors affecting the globaliza-
`tion of clinical trials (particularly into emerging economies), incentives to induce
`R&D into third-world diseases, how industry funding of the US Food and Drug
`Administration through user fees has affected review times and safety withdrawal
`rates, factors affecting the extent of and the price impacts from generic entry, and
`the impact of direct-to-consumer marketing of prescription pharmaceuticals on
`drug utilization.
`In other research, Berndt has assessed how illness and its treatment affect indi-
`viduals’ ability to function at work. More generally, his research deals with assess-
`ing the sources of productivity growth and how productivity is measured. He has
`implemented methods for adjusting prices for changes in quality in the pharma-
`ceutical, health care, personal computer hardware, prepackaged software, and per-
`sonal digital assistant product categories. In addition to carrying out his teaching
`duties at MIT Sloan, Professor Berndt is co-director of the Biomedical Enterprise
`Program, a joint program of MIT Sloan and the Harvard-MIT Division of Health
`Sciences and Technology.
`Patricia M. Danzon is Celia Moh Professor at the Wharton School, University of
`Pennsylvania, where she is Professor and former Chair of the Health Care Systems
`Department, and Professor of Insurance and Risk Management. She is also Chair
`of the Health Care Systems Department. Professor Danzon received a BA First
`Class in politics, philosophy and economics from Oxford University, England,
`
`
`
`00_Danzon_Prelims.indd vii00_Danzon_Prelims.indd vii
`
`
`
`1/28/2012 6:36:01 PM1/28/2012 6:36:01 PM
`
`

`

`OUP UNCORRECTED PROOF – FIRST-PROOF, 01/28/12, NEWGEN
`
`viii
`
`Contributors
`
`and a PhD in economics from the University of Chicago. Dr. Danzon’s previous
`positions include associate professor at Duke University, research economist at the
`Rand Corporation, and visiting professor at the University of Chicago.
`Professor Danzon is an internationally recognized expert in the fields of health
`care, pharmaceuticals, insurance, and liability systems. She is a member of the
`Institute of Medicine and of the National Academy of Social Insurance. She is also
`a research associate of the National Bureau of Economic Research. Her board mem-
`berships include the Board of the International Health Economics Association.
`She has served as a consultant on international health care issues to the World
`Bank, the European Commission Working Group on Pharmaceuticals, the New
`Zealand Treasury, the Asian Development Bank, and US Agency for International
`Development. In the United States her consulting experience includes work for
`the American Medical Association, American Hospital Association, Insurance
`Services Office, Institute for Civil Justice, Alliance of American Insurers, and
`Pharmaceutical Manufacturers’ Association.
`Professor Danzon is an associate editor of Journal of Health Economics and
`International Journal of Health Care Finance and Economics. She was previously an
`associate editor of the American Economic Review, Journal of Risk and Insurance,
`and Journal of BioLaw and Business. She has published widely in scholarly journals
`on a broad range of subjects related to medical care, pharmaceuticals, insurance,
`and the economics of law.
`Joseph A. DiMasi is Director of Economic Analysis at the Tufts Center for the
`Study of Drug Development, Tufts University. His research focuses on the drug
`development and regulatory review process and the economics of the pharmaceu-
`tical industry. His current research examines the impact of policies and practices
`to speed the development and review processes for new drugs, how firms have
`organized internally to accommodate the increasing need for pharmacoeconomic
`studies, the role that pharmacoeconomic evaluations have played in the R&D pro-
`cess, the cost of new drug development, and success and attrition rates for inves-
`tigational drugs. Dr. DiMasi presents his work at numerous professional and
`industry conferences in the United States and abroad and has testified before the
`US Congress in hearings leading up to the FDA Modernization Act of 1997 and
`the reauthorization of the Prescription Drug User Fee Act. Dr. DiMasi received his
`PhD in economics from Boston College.
`Michael Drummond is Professor of Health Economics and former Director
`(December 1995‒September 2005) of the Centre for Health Economics at the
`University of York. His particular area of interest is the economic evaluation of
`health care treatments and programs. He has undertaken evaluations in a wide
`range of medical fields including care of the elderly, neonatal intensive care,
`immunization programs, services for people with AIDS, eye health care, and
`pharmaceuticals.
`He is the author of two major textbooks and more than 600 scientific papers,
`has acted as a consultant to the World Health Organization, and was Project Leader
`
`
`
`00_Danzon_Prelims.indd viii00_Danzon_Prelims.indd viii
`
`
`
`1/28/2012 6:36:01 PM1/28/2012 6:36:01 PM
`
`

`

`OUP UNCORRECTED PROOF – FIRST-PROOF, 01/28/12, NEWGEN
`
`contributors
`
`ix
`
`of a European Union Project on the Methodology of Economic Appraisal of Health
`Technology. He has also served on the boards of directors of the International
`Society of Technology Assessment in Health Care and the International Society
`for Pharmacoeconomics and Outcomes Research. He has been president of the
`International Society for Pharmacoeconomics and Outcomes Research. He is cur-
`rently coeditor-in-chief of Value in Health.
`His recent projects relate to the conduct of economic evaluations and their use
`in health care decision making.
`Mark Duggan is Professor of Business and Public Policy at the Wharton School at
`the University of Pennsylvania and a research associate at the National Bureau of
`Economic Research. He received his BS and MS degrees in electrical engineering
`at MIT in 1992 and 1994, respectively, and his PhD in economics from Harvard
`University in 1999. Professor Duggan’s research focuses on the effect of govern-
`ment expenditure programs such as Social Security, Medicare, and Medicaid on the
`behavior of individuals and firms. One strand of his research has investigated the
`impact of federal disability programs such as Social Security Disability Insurance
`on labor-market outcomes. Professor Duggan’s research has been published in
`leading academic journals including the American Economic Review, Journal of
`Political Economy, and Quarterly Journal of Economics and has been featured in
`outlets such as The Economist, the New York Times, and the Wall Street Journal.
`Professor Duggan is currently a coeditor at the Journal of Public Economics and
`also serves on the editorial board of American Economic Journal: Economic Policy.
`He was the 2010 recipient of the ASHEcon Medal, awarded every two years by the
`American Society of Health Economists to the economist aged 40 years or under
`in the United States who has made the most significant contributions to the field
`of health economics. Along with his coauthor Fiona Scott Morton, he received the
`National Institute for Health Care Management 2011 Health Care Research Award
`for their research on Medicare Part D, which examined the effect of this program
`on pharmaceutical prices. Professor Duggan was a fellow of the Alfred P. Sloan
`Foundation from 2004 to 2006, and Visiting Fellow at the Brookings Institution
`from 2006 to 2007. He served from 2009 to 2010 as the senior economist for Health
`Care Policy at the White House Council of Economic Advisers.
`Rebecca S. Eisenberg is Robert and Barbara Luciano Professor of Law at the
`University of Michigan Law School. Professor Eisenberg is a graduate of Stanford
`University and Boalt Hall School of Law at the University of California, Berkeley,
`where she was articles editor of the California Law Review. Following law school,
`she served as law clerk for Chief Judge Robert F. Peckham on the US District
`Court for the Northern District of California and then practiced law as a liti-
`gator in San Francisco. She joined the Michigan Law faculty in 1984. Professor
`Eisenberg regularly teaches courses in patent law, trademark law, and Food and
`Drug Administration law, and she runs workshops on intellectual property and
`student scholarship. She has previously taught courses on torts, legal regulation
`of science, and legal issues in biopharmaceutical research. She has written and
`
`
`
`00_Danzon_Prelims.indd ix00_Danzon_Prelims.indd ix
`
`
`
`1/28/2012 6:36:01 PM1/28/2012 6:36:01 PM
`
`

`

`OUP UNCORRECTED PROOF – FIRST-PROOF, 01/28/12, NEWGEN
`
`x
`
`Contributors
`
`lectured extensively about the role of intellectual property in biopharmaceutical
`research, publishing in scientific journals as well as law reviews. She spent the
`1999−2000 academic year as a visiting professor of law, science, and technology at
`Stanford Law School. She has received grants from the Ethical, Legal, and Social
`Implications Program of the Human Genome Project from the US Department of
`Energy Office of Biological and Environmental Research for her work on private
`appropriation and public dissemination of DNA sequence information. Professor
`Eisenberg has played an active role in public policy debates concerning the role of
`intellectual property in biopharmaceutical research.
`
`Craig Garthwaite is Assistant Professor of Management and Strategy at the Kellogg
`School of Management at Northwestern University. He is an applied microecono-
`mist whose research focuses broadly on public economics, health economics, and
`political economy. His recent projects have examined the economic benefits of
`health care innovations and the effect of Oprah Winfrey’s endorsement of then-
`candidate President Barack Obama during the 2008 Democratic presidential pri-
`mary. Garthwaite received a BA and a master’s degree in public policy from the
`University of Michigan. Before receiving his PhD in economics from the University
`of Maryland, he served in a variety of public policy positions including Director of
`Research for the Employment Policies Institute. He has testified before the United
`States House of Representatives and several state legislatures on matters related to
`the minimum wage and health care reforms.
`
`Dana P. Goldman is Professor and the Norman Topping Chair in Medicine and
`Public Policy at the University of Southern California. Until fall 2009, he held the
`Rand Corporation Distinguished Chair in Health Economics and directed Rand’s
`Economics, Finance, and Organization Program. He is also an adjunct professor of
`health services and radiology at University of California, Los Angeles.
`Dr. Goldman is a nationally-recognized health economist influential in both
`academic and policy circles. He is the author of over 100 articles and book chapters,
`including articles in some of the most prestigious medical, economic, health pol-
`icy, and statistics journals. He is a member of the Institute of Medicine and a health
`policy advisor to the Congressional Budget Office, and is a frequent speaker on
`health care issues. He serves on several editorial boards, including Health Affairs
`and American Journal of Managed Care. He is also a founding editor of the Forum
`for Health Economics and Policy, an online journal devoted to health economics
`and health policy.
`Dr. Goldman was the 2009 recipient of the Eugene Garfield Economic
`Impact Prize, recognizing his outstanding research demonstrating how medical
`research impacts the economy. He received the National Institute for Health Care
`Management Research Foundation Award for excellence in health policy, and the
`Alice S. Hersh New Investigator Award recognizing the contributions of a young
`scholar to the field of health services research. He also has served on several panels
`for the National Academy of Sciences and Institute of Medicine, including a cur-
`rent panel on the fiscal future of the United States. Dr. Goldman’s research sponsors
`
`
`
`00_Danzon_Prelims.indd x00_Danzon_Prelims.indd x
`
`
`
`1/28/2012 6:36:01 PM1/28/2012 6:36:01 PM
`
`

`

`OUP UNCORRECTED PROOF – FIRST-PROOF, 01/28/12, NEWGEN
`
`contributors
`
`xi
`
`include the National Institutes of Health, National Institute on Aging, National
`Cancer Institute, National Science Foundation, Amgen, Merck, Genentech, Pfizer,
`UnitedHealth, Pacificare, California Healthcare Foundation, Smith Richardson
`Foundation, US Department of Defense, US Department of Labor, and the Agency
`for Healthcare Research and Quality.
`Dr. Goldman is also a research associate with the National Bureau of Economic
`Research, the nation’s leading economic research organization. He is Director of
`the Rand/UCLA Health Services Research Postdoctoral Training Program. He is
`also a founder and managing director of Precision Health Economics, a consulting
`firm to the health care industry. Dr. Goldman received his BA summa cum laude
`from Cornell University and a PhD in economics from Stanford University.
`Henry G. Grabowski is Professor Emeritus and Director of the Program in
`Pharmaceutical Health Economics at Duke University. Before first joining the
`Duke faculty in 1972, he was a research associate for the National Bureau of
`Economic Research, an assistant professor of economics at Yale University, and a
`visiting scholar at the Health Care Financing Administration. Professor Grabowski
`earned his PhD in economics in 1967 from Princeton University, from which he
`also earned his MA in 1964.
`Professor Grabowski’s teaching and research interests revolve around the eco-
`nomics of the pharmaceutical industry, the economics of innovation, and govern-
`mental regulation of business. His research studies have examined government
`policy actions and their effects on the pharmaceutical industry, costs and returns
`to the industry, and issues involving generic competition and intellectual property.
`He has published over 75 articles in the leading academic journals and provided
`chapters to nearly 30 books.
`Professor Grabowski has served as an advisor for various organizations,
`including the Institute of Medicine, the Federal Trade Commission, the National
`Academy of Sciences, the Office of Technology Assessment, and the General
`Accounting Office. He has also worked for the Arts and Sciences Council and for
`its Academic Priorities Committee. He was the program director for the Program
`in Pharmaceuticals and Health Economics for 20 years.
`Scott E. Harrington is Alan B. Miller Professor in the Health Care Management
`and Insurance and Risk Management departments at the Wharton School of
`the University of Pennsylvania. He is an adjunct scholar for health policy at the
`American Enterprise Institute. A former president of both the American Risk and
`Insurance Association and the Risk Theory Society, he is a coeditor of the Journal
`of Risk and Insurance and has published widely on financial risk assessment, risk
`management, and the economics and regulation of insurance. A frequent speaker
`on insurance markets, regulation, and public policy, he has conducted research,
`consulted, or served as an expert for many organizations. He has testified before
`the US House of Representatives and the Senate and before numerous US state leg-
`islative and administrative committees. He currently teaches classes on health care
`financial management, health policy, and health care econometrics.
`
`
`
`00_Danzon_Prelims.indd xi00_Danzon_Prelims.indd xi
`
`
`
`1/28/2012 6:36:01 PM1/28/2012 6:36:01 PM
`
`

`

`OUP UNCORRECTED PROOF – FIRST-PROOF, 01/28/12, NEWGEN
`
`xii
`
`Contributors
`
`Geoffrey Joyce, PhD is Associate Professor of Pharmaceutical Economics at the
`University of Southern California, Director of Health Policy at the Leonard D.
`Schaeffer Center, and a senior economist at the Rand Corporation.
`Dr. Joyce’s research focuses on the costs of medical care and the role of insur-
`ance. He is the author of over 60 articles and book chapters, and his research has
`been published in leading medical, economic, health policy, and statistics journals.
`Dr. Joyce’s research sponsors include the National Institutes of Health, National
`Institute on Aging, the Centers for Medicare and Medicaid Services, the Agency
`for Healthcare Research and Quality, the Department of Defense, Amgen, Merck,
`Genentech, UnitedHealth, Pacificare, and the California Healthcare Foundation.
`Dr. Joyce is also a research associate with the National Bureau of Economic Research
`and co-director of the Rand/UCLA Health Services Research Postdoctoral Training
`Program.
`Don Kenkel is Professor in the Departments of Policy Analysis and Management
`and Economics, and Co-Director of the Institute on Health Economics, Health
`Behaviors and Disparities at Cornell University. Most of his research is in the eco-
`nomics of health promotion and disease prevention. His current research includes
`studies of the economics of smoking- and tobacco-control policies, and direct-to-
`consumer advertising of pharmaceutical products.
`Professor Kenkel is the author of the chapter “Prevention” in the Handbook of
`Health Economics (2000). He has conducted a series of studies on the economics of
`public health policies, including alcohol taxes and other policies to prevent alcohol
`problems, cigarette taxes to prevent youth smoking, and advertising to promote
`smoking cessation. Another area of research and teaching interest is in cost-benefit
`analysis of public policies, especially policies that affect health.
`Hannah E. Kettler is Senior Program Officer and Economist for the Global Health
`Policy and Finance team at the Bill and Melinda Gates Foundation. She is respon-
`sible for a portfolio of grants and projects that aim to secure adequate financing
`and a supportive policy environment for global health-product innovation and
`introduction.
`Before joining the Gates Foundation in March 2003, Hannah led a two-year
`project funded by the Rockefeller Foundation, “Biotechnology and Global Health,”
`at the Institute for Global Health at the University of California, San Francisco.
`The recommendations and evidence base created in this project motivated BIO
`and the Bill and Melinda Gates Foundation to establish BIO Ventures for Global
`Health in 2004.
`Between 1998 and 2001 Hannah worked as senior industrial economist for the
`Office of Health Economics (OHE) in London. The OHE is housed within the
`Association for British Pharmaceutical Industry and conducts research and con-
`sultancy. Hannah’s work focused on the economics of innovation in the pharma-
`ceutical and biotechnology industries, including analyses of merger and alliance
`
`
`
`00_Danzon_Prelims.indd xii00_Danzon_Prelims.indd xii
`
`
`
`1/28/2012 6:36:01 PM1/28/2012 6:36:01 PM
`
`

`

`OUP UNCORRECTED PROOF – FIRST-PROOF, 01/28/12, NEWGEN
`
`contributors
`
`xiii
`
`strategies and cross country comparisons of the performance of biopharmaceuti-
`cal industries.
`Hannah has a PhD in industrial economics from the University of Notre Dame.
`Her dissertation is titled: “Transitions to Competitiveness: Problems of Economic
`Restructuring in East Germany”.
`Eric Keuffel is Assistant Professor in the Department of Risk, Insurance, and
`Healthcare Management at the Fox School of Business at Temple University. Dr.
`Keuffel is a health economist whose research interests include economics and pol-
`icy in the pharmaceutical / life sciences industry, international health systems,
`and the economics of prevention in health. His articles have appeared in both
`economic and health journals, and he has presented his research at domestic and
`international conferences, including the American Society of Health Economists,
`AcademyHealth, and the International Health Economics Association. Before his
`appointment at Fox, Dr. Keuffel served as a consultant to the World Bank/IFC;
`taught health economics at the Wharton School of the University of Pennsylvania;
`and advised pharmaceutical industry clients on strategy, marketing and economic
`issues. He earned his bachelor’s degree in economics (magna cum laude) from
`Princeton University, his master’s degree in public health from the Johns Hopkins
`Bloomberg School of Public Health, and his PhD in applied economics and mana-
`gerial science from the Wharton School of the University of Pennsylvania.
`
`Margaret Kyle is Professor at the Toulouse School of Economics and a researcher
`for the Institut d’Economie Industrielle in Toulouse, France. She formerly served
`as an assistant professor at Duke University and at the London Business School.
`Professor Kyle’s research interests include industrial organization, productivity,
`economics of innovation, and health policy. She earned her PhD in economics
`from MIT.
`Darius Lakdawalla is Associate Professor in the University of Southern California
`School of Policy, Planning, and Development, and Director of Research at the USC
`Schaeffer Center for Health Policy and Economics. His research has been con-
`cerned with the economics of risks to health, and the organization of health care
`markets. In particular, he has published studies exploring the reasons behind the
`declining use of nursing homes by the elderly, rising rates of obesity in America,
`acceleration in the rate of new HIV infections, and the surprising growth in dis-
`ability among younger Americans.
`Dr. Lakdawalla received his PhD in economics from the University of Chicago
`and his bachelor’s degree in mathematics and philosophy from Amherst College.
`His work has been published in leading journals of economics, medicine, and health
`policy. He is currently Faculty Research Fellow at the National Bureau of Economic
`Research, in Cambridge, Massachusetts, and the former director of research at the
`Bing Center for Health Economics at the RAND Corporation.
`
`
`
`00_Danzon_Prelims.indd xiii00_Danzon_Prelims.indd xiii
`
`
`
`1/28/2012 6:36:01 PM1/28/2012 6:36:01 PM
`
`

`

`OUP UNCORRECTED PROOF – FIRST-PROOF, 01/28/12, NEWGEN
`
`xiv
`
`Contributors
`
`Anup Malani is Lee and Brena Freeman Professor of Law at the University of
`Chicago. He is also a professor at the University of Chicago Pritzker School of
`Medicine, University Fellow at Resources for the Future, Washington, DC; Faculty
`Research Fellow at the National Bureau of Economic Research, and an editor of
`Journal of Law and Economics.
`Mr. Malani teaches health law, food and drug law, insurance law, bankruptcy,
`contracts and corporations. His research interests include law and economics
`(welfare evaluation of legal rules and the economics of products liability), health
`economics and policy (control of infectious disease, the conduct of clinical tri-
`als, medical malpractice and drug products liability, conflicts of interest in med-
`ical research, placebo effects, and heterogeneity in treatment effects of drugs and
`devices), and corporate law and finance (executive compensation, the role of non-
`profit firms, corporate philanthropy). His research articles have been published in
`major law, economics, and medical journals, including the Harvard Law Review,
`Journal of Political Economy, and Archives of Internal Medicine. His writing can
`also be found in popular media, such as Forbes and the Chicago Tribune.
`Mr. Malani graduated from the University of Chicago Law School in 2000.
`He clerked for the Hon. Stephen F. Williams, US Court of Appeals for the DC
`Circuit in 2000‒2001 and for US Supreme Court Justice Sandra Day O’Connor in
`2001‒2002. Mr. Malani received a PhD from the University of Chicago Department
`of Economics in 2003. Between 2002 and 2006, Mr. Malani was an associate pro-
`fessor at the University of Virginia Law School and the Health Evaluation Sciences
`Department of the University of Virginia Medical School. He was a visiting profes-
`sor at Harvard Law School in fall 2006 and during the 2008-2009 academic year,
`when he was also the interim director of the Petrie-Flom Center for Health Law
`Policy, Biotechnology, and Bioethics at Harvard Law School.
`Alan Mathios is Rebecca Q. and James C. Morgan Dean of Cornell University’s
`College of Human Ecology. Prior to being dean he served as Senior Associate Dean
`for Academic Affairs and Undergraduate Education for the College of Human
`Ecology. He is a member of the Department of Policy Analysis and Management
`and has served as Associate Chair and Director of Undergraduate Studies for the
`department. He is coeditor of Journal of Consumer Policy and serves on the editorial
`boards of Journal of Consumer Affairs and Journal of Public Policy and Marketing.
`He is also the project leader on the Merck Foundation Consumers, Pharmaceutical
`Policy and Health Program.
`Mathios came to Cornell following six years of employment at the Federal
`Trade Commission (FTC), where he served as a staff economist in the Division of
`Economic Policy Analysis and was recognized with the Outstanding Scholarship
`Award, the Excellence in Economics Award, and the Award for Superior Service
`to the FTC. A major focus of his research is on the effect of Food and Drug
`Administration regulatory policies on consumer and firm behavior, including the
`examination of the impact of health claims in food advertising and direct to con-
`sumer advertising of pharmaceutical products on health outcomes. His research
`
`
`
`00_Danzon_Prelims.indd xiv00_Danzon_Prelims.indd xiv
`
`
`
`1/28/2012 6:36:01 PM1/28/2012 6:36:01 PM
`
`

`

`OUP UNCORRECTED PROOF – FIRST-PROOF, 01/28/12, NEWGEN
`
`contributors
`
`xv
`
`also focuses on government tax policies and their impact on smoking onset and
`cessation. His most recent research is on a comparison of the effectiveness of
`tobacco-sponsored, pharmaceutical-firm-sponsored, and public-sponsored anti-
`smoking advertising on smoking behavior. His research has been funded by a vari-
`ety of sources including the National Cancer Institute, the Robert Wood Johnson
`Foundation, and the Merck Foundation Co. He has been the recipient of a num-
`ber of teaching and advising awards including the SUNY Chancellor’s Award for
`Excellence in Teaching and the Cornell University Kendal S. Carpenter Advising
`Award.
`Joseph P. Newhouse is John D. MacArthur Professor of Health Policy and
`Management at Harvard University, Director of the Division of Health Policy
`Research and Education, Chair of the Committee on Higher Degrees in Health
`Policy, and Director of the Interfaculty Initiative in Health Policy. He is a mem-
`ber of the faculties of the John F. Kennedy School of Government, the Harvard
`Medical School, the Harvard School of Public Health, and the Faculty of Arts and
`Sciences, as well as a Faculty Research Associate of the National Bureau of Economic
`Research. He received BA and PhD degrees in economics from Harvard University.
`After receiving his bachelor’s degree, he was a Fulbright scholar in Germany. Dr.
`Newhouse spent the first 20 years of his career at the Rand Corporation, where he
`designed and directed the Rand Health Insurance Experiment, whic