Managing the Medical Arms Race: Innovation and Public Policy in the Medical Device Industry

The allure of medical innovation is powerful - it holds out the promise of perfect health, the end of pain, the deferral of death. Our insatiable appetite for costly new technologies, fed by a profusion of innovations and the profits they generate, has led to what has been dubbed the medical arms race. During the last several decades government has been called upon to manage the escalation of this race. This is an examination of the profound influence of government policies on medical innovation. She explains how these policies have proliferated to affect every stage of the innovative process in medical device technology - from the first research idea to the patient’s bedside. Drawing on case studies of technologies as diverse as lasers, cardiac pacemakers, CT scanners and IUDs, she traces the interaction between the industry and government institutions, including the National Institutes of Health, the FDA and the Medicare and Medicaid programs. Public policies during the 1950s and 1960s, Foote discovers, tended to promote innovation, while the regulation and cost controls of the 1970s and 1980s began to inhibit it. For the 1990s and beyond she proposes incremental policy improvements that will rationalize and streamline government intervention. She cautions that we must recognize the limits of medical technology and public policy to cure all ills.