Author Abstract
Alzheimer’s disease (AD) affects one in ten people aged 65 or older and is the most expensive disease in the United States. We describe the central economic questions raised by AD. While there is overlap with the economics of aging, the defining features of the "economics of Alzheimer’s disease" is an emphasis on cognitive decline, choice by cognitively impaired patients, and a host of issues where dynamic contracts between patients and caregivers are hard to enforce. The presence of cognitively challenged consumers also opens up new areas of study at the intersection of law and economics for it is not clear if firms will exploit these individuals or whether competitive forces will temper the behavior of firms. In addition, the issue of innovation--in prevention, delivery and medicines—is is amplified in the economics of AD, where there may be insufficient investments in basic science and where a fragmented insurance system (at least in the United States) discourages private investments in these innovations. We discuss the role of market frictions and "missing medicines" in drug innovation and highlight how frameworks and toolkits of economists can help in our understanding of the determinants and effects of AD on health.
Paper Information
- Full Working Paper Text
- Working Paper Publication Date: August 2020
- HBS Working Paper Number: NBER Working Paper Series, No. 27760
- Faculty Unit(s): Technology and Operations Management
