PAM_2000_Spring_2009_Lecture_3

PAM_2000_Spring_2009_Lecture_3 - PAM 2000 Lecture 3 Agenda:...

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    PAM 2000 Lecture 3 Agenda: FDA drug approval Market equilibrium Allocative efficiency Shifts in curves and efficiency Policy interventions: price floors and ceilings
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    Reading for PAM 2000 M,B,N Ch. On FDA approval
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    Correction from last time: If a, b, c, d, and e >0 Q O D  = a - bP O  + cY + dP s  – eP c
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    FDA drug approval process Non-market allocation Prior 1962 Amendments to the Food,  Drug and Cosmetics Act of 1938  (Kefauver-Harris Amendments), FDA  had to approve within 180 days 1962 amendments added “proof of  efficacy in intended use”
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    FDA drug approval process Removed time constraints By 1970s time to approval time had  risen to 8 to 10 years Costly testing: $800 million per drug Costly delays: delay of beta blockers  cost 250,000 lives
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    FDA drug approval process Two types of error: Error of introducing an unsafe drug:  Type I error Error of withholding a beneficial drug:  Type II error Think of benefits and costs of delaying  drug
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    FDA drug approval process Note: no price to determine Q of testing
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This note was uploaded on 03/03/2009 for the course PAM 2000 taught by Professor Evans,t. during the Spring '07 term at Cornell University (Engineering School).

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PAM_2000_Spring_2009_Lecture_3 - PAM 2000 Lecture 3 Agenda:...

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