The physician/patient relationship is a paradigm for any expert/client relationship. The physician both diagnoses the patien t's illness and recommends a treatment. This dual role gives the phys ician incentive to recommend treatments whose costs outweigh their me dical benefits. These socially...

This paper examines the relationship between basic and applied pharmaceutical research. The authors focus on three stages of R&D: government-funded basic research; publication in medical journals; and industry-funded applied R&D. They estimate that a one percent increase in basic research in a...