Medical Innovation and Health Inequality: Evidence from Direct-Acting Antivirals

Abstract

We study the incidence of innovation-induced externalities by race. Following the introduction of direct-acting antivirals (DAA) for Hepatitis C (HCV), we show that liver transplants increased for Black (11.9%), Hispanic (34.2%), and white (56.6%) HCV- end-stage liver disease (ESLD) patients. However, these additional transplants went disproportionately to white patients. Only white HCV- ESLD patients saw a increase in the rate of transplantation (19.5 pp), in spite of the fact that marginal white registrants were of better liver health relative to marginal Black registrants. We conclude that most HCV- ESLD racial groups benefited from the externality generated by DAAs for HCV+ (with the clear exception of Asian patients) but that their introduction likely widened disparities in transplant outcomes between white and non-white patients. Joint paper with Kevin Callison and Keith Teltser.