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The United States’ commitment to comparative effectiveness research for medical treatments could hamper young companies and delay some products, but it also could create more value for successful early-stage companies, agreed speakers at a roundtable on biodesign held at the Stanford Graduate School of Business.
In 2009, the government began the work of reforming America’s health care system. Embedded in the stimulus funds was $1.1 billion for comparative effectiveness research, which would compare different treatments for the same disease to find the most effective approach. Supporters argued it would reduce spending money on what doesn’t make people healthier. Policymakers have indicated that this will be a key part of their efforts to contain costs in the overhaul of the nation’s health care system going forward.

But while there are opportunities to increase both efficacy and effectiveness, there are also many challenges — which may have unintended consequences — to conducting the research. Subjecting existing drugs and devices to large clinical trials could be costly, time-consuming, and likely unproductive. Moreover, generating comparative effectiveness data for new technologies will increase by years the time to bring them to market — and may even prevent many promising but unproven technologies from entering the market at all.

The Stanford Biodesign Roundtable brought together multiple stakeholders to discuss how entrepreneurs and venture capitalists should think about the impact of comparative effectiveness research. One of the implications is that funding will be harder to obtain for early-stage medical device companies.

With venture capital firms less willing to invest, the ultimate effect may be to discourage innovation. More details

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Also on Stanford Knowledgebase:

  1. Comparative Effectiveness Research Could Pose Barriers to Medical Development
  2. Who Is Paying for Uninsured Medical Patients?
  3. Integrated Systems Improve Medical Care and Control Costs

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