Price Indexes for Clinical Trial Research: A Feasibility Study
AbstractWe estimate hedonic price indexes for clinical trial research, an important component of biomedical R&D, using a large sample of agreements between trial sponsors and clinical investigators obtained from Medidata Solutions Worldwide Inc. Nominal prices measured as total grant cost per patient rose by a factor of 4.5 between 1989 and 2011, while the NIH Biomedical R&D Price Index (BRDPI) focused on input costs rose only 2.2-fold. Most of the disparity appears to be attributable to changes in the nature and organization of clinical trials: during this period the average number of patients per site fell substantially while “site work effort” more than doubled. After controlling for these changes in the characteristics of investigator agreements using a variety of methods based on hedonic regressions, we find that the estimated rate of inflation in clinical trials costs tracks the BDRPI very closely. Results from this study suggest that it should be feasible for statistical agencies to develop a producer price index for this type of R&D activity, contributing to broader efforts to develop a deflator for contracted R&D services.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18918.
Date of creation: Mar 2013
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Find related papers by JEL classification:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology
- O49 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-30 (All new papers)
- NEP-HEA-2013-03-30 (Health Economics)
- NEP-INO-2013-03-30 (Innovation)
- NEP-MAC-2013-03-30 (Macroeconomics)
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