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Debate on the cost of innovation in healthcare: Is it too costly?

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Debate on the cost of innovation in healthcare: Is it too costly?

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This paper summarises a structured panel session regarding the cost of innovation in healthcare. The debate took place during the 2016 Simnovate Conference at McGill University. The audience, panel members and venue largely included members from academia as well as representatives from industry and organised medicine. The goal of the debate was to consider a balanced argument regarding the views of healthcare innovation and the associated costs. VJD ### Demand and cost The demand for healthcare is rising. The burden of disease is increasing. The population is ageing. We face the threat of emerging infectious diseases. We are struggling with health disparities.1 At the same time, all nations are facing the challenges in providing access, cost and quality healthcare.2 We are here today to talk about cost and to debate the various ways in which innovation may lead to an increase or a reduction of cost. Indeed, healthcare costs are extremely high and there is much concern about whether recent trends are sustainable. For instance, healthcare spending accounts for 19% of gross domestic product (GDP) in the USA and it is expected to grow another 4% this coming year. This is the basis for our debate. ### Drugs, medical devices and hospital care A JAMA study in November 2013 noted that 91% of increased healthcare costs between 2000 and 2011 were because of the increase in the price of drugs, medical devices and hospital care.3 It is argued by industry that to develop novel breakthrough therapies, they must invest in innovation which is risky and costly. By charging for these new therapies, industry can recover the losses related to high-risk research and development. In essence, industry needs to be incentivised and reimbursed for the dollars they put in the innovation, which often includes patents and other costs to protect the innovation. Consider exciting developments on the horizon, such …

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... But innovation does reduce costs. An excellent example is Moore's law where a significant set of technologies are not just improving, but exponentially improving and reducing costs (examples are the use of mobile devices in the diagnosis and management of a host of disease conditions)[135]. ...
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