Pricing, Profits, and Technological Progress in the Pharmaceutical Industry
AbstractThe decades-old debate over pharmaceutical industry prices, profits, and innovation has again intensified. A number of events coalesced to refocus public interest on pharmaceuticals. Contributing to public concern were Bureau of Labor Statistics price index increases for pharmaceuticals far outpacing those for the products of other industries. Another prominent characteristic of the pharmaceutical industry has been its extraordinarily high reported profitability. This article examines the phenomena that precipitated the current pharmaceuticals debate, their historical antecedents, and the principal questions at issue. In the author's considered judgment, a pell-mell march toward regulation of pharmaceutical industry pricing could seriously impair the industry's incentives for investment in new products.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by American Economic Association in its journal Journal of Economic Perspectives.
Volume (Year): 7 (1993)
Issue (Month): 3 (Summer)
Find related papers by JEL classification:
- L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Ferrara, Ida & Kong, Ying, 2008. "Can health insurance coverage explain the generic competition paradox?," Economics Letters, Elsevier, vol. 101(1), pages 48-52, October.
- Aysegul Timur & Gabriel Picone & Jeffrey DeSimone, 2011.
"Has the European union achieved a single pharmaceutical market?,"
International Journal of Health Care Finance and Economics,
Springer, vol. 11(4), pages 223-244, December.
- Aysegul Timur & Gabriel Picone & Jeffrey S. DeSimone, 2010. "Has the European Union Achieved a Single Pharmaceutical Market?," NBER Working Papers 16261, National Bureau of Economic Research, Inc.
- Peter Kotzian, 2002. "Stuck in the Middle: Welfare Effects of the European Pharmaceutical Markets' Incomplete Integration and a Possible Remedy," MZES Working Papers 59, MZES.
- Guillem López & Jaume Puig, 1999. "Review of the literature on reference pricing," Working Papers, Research Center on Health and Economics 362, Department of Economics and Business, Universitat Pompeu Fabra.
- Antonio Giuffrida, 2001. "Learning from the Experience: The Inter-American Development Bank and Pharmaceuticals," IDB Publications 53858, Inter-American Development Bank.
- Okunade, Albert A. & Murthy, Vasudeva N. R., 2002. "Technology as a 'major driver' of health care costs: a cointegration analysis of the Newhouse conjecture," Journal of Health Economics, Elsevier, vol. 21(1), pages 147-159, January.
- Edgardo BarandiarÃ¡n & Ricardo Paredes, 2002. "ProtecciÃ³n de la Competencia en Chile: El Estado y Laboratorios Chile y Recalcine (1992-93)," Documentos de Trabajo 222, Instituto de Economia. Pontificia Universidad Católica de Chile..
- Drummond, Michael & Jonsson, Bengt & Rutten, Frans, 1997. "The role of economic evaluation in the pricing and reimbursement of medicines," Health Policy, Elsevier, vol. 40(3), pages 199-215, June.
- Kurt R. Brekke & Ingrid Königbauer & Odd Rune Straume, 2006.
"Reference Pricing of Pharmaceuticals,"
CESifo Working Paper Series
1825, CESifo Group Munich.
- Richard, Oliver & Van Horn, Larry, 2004. "Persistence in prescriptions of branded drugs," International Journal of Industrial Organization, Elsevier, vol. 22(4), pages 523-540, April.
- Beatriz Domínguez & Juan José Ganuza & Gerard Llobet, 2005.
"R&D in the pharmaceutical industry: A world of small innovations,"
Economics Working Papers
936, Department of Economics and Business, Universitat Pompeu Fabra.
- Juan-José Ganuza & Gerard Llobet & Beatriz Domínguez, 2009. "R& D in the Pharmaceutical Industry: A World of Small Innovations," Management Science, INFORMS, vol. 55(4), pages 539-551, April.
- Beatriz Dominguez & Juan-José Ganuza & Gerard Llobet, 2006. "R&D In The Pharmaceutical Industry: A World Of Small Innovation," Working Papers wp2006_0601, CEMFI.
- Abbott, Thomas III, 1995. "Price regulation in the pharmaceutical industry: Prescription or placebo?," Journal of Health Economics, Elsevier, vol. 14(5), pages 551-565, December.
- Ferrara, Ida & Missios, Paul, 2012.
"Pricing of drugs with heterogeneous health insurance coverage,"
Journal of Health Economics,
Elsevier, vol. 31(2), pages 440-456.
- Paul Missios & Ida Ferrara, 2010. "Pricing of Drugs with Heterogeneous Health Insurance Coverage," Working Papers 026, Ryerson University, Department of Economics.
- Tapon, Francis & Cadsby, Charles Bram, 1996. "The optimal organization of research: evidence from eight case studies of pharmaceutical firms," Journal of Economic Behavior & Organization, Elsevier, vol. 31(3), pages 381-399, December.
- Regan, Tracy L., 2008. "Generic entry, price competition, and market segmentation in the prescription drug market," International Journal of Industrial Organization, Elsevier, vol. 26(4), pages 930-948, July.
- Guillem López & Jaume Puig, 1999. "Review of the literature on reference pricing," Economics Working Papers 362, Department of Economics and Business, Universitat Pompeu Fabra.
- Jan Peter Wogart, 2006. "Multiple Interfaces of Big Pharma and the Change of Global Health Governance in the Face of HIV/AIDS," GIGA Working Paper Series 24, GIGA German Institute of Global and Area Studies.
- Inderst, Roman, 2002. "Why competition may drive up prices," Journal of Economic Behavior & Organization, Elsevier, vol. 47(4), pages 451-462, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros) or (Michael P. Albert).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.