ABSTRACT
This chapter discusses the relationship between medical innovations and ageing from a health economics perspective and surveys empirical evidence on medical research and development incentives, research and development costs of pharmaceuticals, and the cost-effectiveness of health innovations. Particular focus is on the endogeneity of medical technological progress to expected market size and on the conceptualization of ageing as an accumulation of health deficits. This chapter also discusses the role of medical progress for longevity and health inequality and presents a framework to assess the effect of increased longevity on the value of life.
