In the United States, drug safety and efficacy are primarily regulated by the Food and Drug Administration (FDA) and the legal system, which gives manufacturers large incentives to produce safe drugs and provide proper warnings for side effects, since patients can sue manufacturers that provide...

We review and extend the economic analysis of mitigating risks in the presence of health shocks. The existing literature is mainly focused on how shocks affect consumption, for example through their impact on medical spending. We argue that this focus is limited in that shocks to health itself,...