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By Varun Prasad
Healthcare is projected to soon become the industry with the largest amount of spending on research and development in the world. While competition has the potential to catalyze the development of new healthcare technologies and drive down costs, increases in competition have also been thought to hinder innovation as a result of thinner profit margins and reduced incentives. I estimate whether and to what extent competition in the medical device industry promotes innovation. Using Food and Drug Administration data on medical device applications from 1976 to 2019, I examine how original equipment manufacturers respond to the entry of third-party reprocessed devices. I find that, when controlling for year and medical specialty, the introduction of a reprocessed device leads to an almost five-fold increase in new device applications by original manufacturers after both one and two years. These results suggest that an increase in competition within the medical device market has spurred innovation and the development of new technologies.
Advisors: Professor James Roberts, Professor David Ridley | JEL Codes: L1, D22, L65
By Robert Van Dusen
The goal of the paper is to better inform policy makers on the optimal placement of trauma center facilities. Below, I examine the effect of Californian trauma centers vs. standard emergency departments on traffic fatalities for 2002 to 2008. Hospital addresses are geocoded and compared to the geographic coordinates of fatal car accidents provided through USDOT in order to create a dependent fatality density variable for every hospital at different radii. Demographic controls for different radii are constructed using ArcGIS
to serve as a model for traffic fatalities.
Advisor: Frank Sloan, Kent Kimbrough | JEL Codes: I1, I10, I18 | Tagged: