The impact of price regulation on the launch delay of new drugs-evidence from twenty-five major markets in the 1990s
AbstractWe analyze the effect of price regulation on delays in launch of new drugs. Because a low price in one market may 'spill-over' to other markets, through parallel trade and external referencing, manufacturers may rationally prefer longer delay or non-launch to accepting a relatively low price. We analyze the launch in 25 major markets, including 14 EU countries, of 85 new chemical entities (NCEs) launched between 1994 and 1998. Each NCE's expected price and market size in a country are estimated using lagged average price and market size of other drugs in the same (or related) therapeutic class. We estimate a Cox proportional hazard model of launch in each country, relative to first global launch. Only 55% of the potential launches occur. The US leads with 73 launches, followed by Germany (66) and the UK (64). Only 13 NCEs are launched in Japan, 26 in Portugal and 28 in New Zealand. The results indicate that countries with lower expected prices or smaller expected market size have fewer launches and longer launch delays, controlling for per capita income and other country and firm characteristics. Controlling for expected price and volume, country effects for the likely parallel export countries are significantly negative. Copyright © 2004 John Wiley & Sons, Ltd.
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 John Wiley & Sons, Ltd. in its journal Health Economics.
Volume (Year): 14 (2005)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749
Other versions of this item:
- Patricia M. Danzon & Y. Richard Wang & Liang Wang, 2003. "The Impact of Price Regulation on the Launch Delay of New Drugs - Evidence from Twenty-Five Major Markets in the 1990s," NBER Working Papers 9874, National Bureau of Economic Research, Inc.
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Danzon, Patricia M & Chao, Li-Wei, 2000. "Does Regulation Drive out Competition in Pharmaceutical Markets?," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 311-57, October.
- Patricia M. Danzon, 1998. "The Economics of Parallel Trade," PharmacoEconomics, Springer Healthcare | Adis, vol. 13(3), pages 293-304.
- Roy, Santanu & Saggi, Kamal, 2011.
"Equilibrium parallel import policies and international market structure,"
Policy Research Working Paper Series
5802, The World Bank.
- Roy, Santanu & Saggi, Kamal, 2012. "Equilibrium parallel import policies and international market structure," Journal of International Economics, Elsevier, vol. 87(2), pages 262-276.
- Kamal Saggi & Santanu Roy, 2011. "Equilibrium Parallel Import Policies and International Market Structure," Vanderbilt University Department of Economics Working Papers 1113, Vanderbilt University Department of Economics.
- Saradindu Bhaduri & Thomas Brenner, 2013. "Examining the determinants of drug launch delay in pre-TRIPS India," The European Journal of Health Economics, Springer, vol. 14(5), pages 761-773, October.
- Vincenzo Atella & Jay Bhattacharya & Lorenzo Carbonari, 2008.
"Pharmaceutical industry, drug quality and regulation. Evidence from US and Italy,"
CEIS Research Paper
138, Tor Vergata University, CEIS, revised 16 Dec 2008.
- Vincenzo Atella & Jay Bhattacharya & Lorenzo Carbonari, 2008. "Pharmaceutical Industry, Drug Quality and Regulation: Evidence from US and Italy," NBER Working Papers 14567, National Bureau of Economic Research, Inc.
- Birg, Laura, 2013. "Pharmaceutical regulation and health policy objectives," Center for European, Governance and Economic Development Research Discussion Papers 183, University of Goettingen, Department of Economics.
- Patricia M. Danzon & Eric L. Keuffel, 2013. "Regulation of the Pharmaceutical-Biotechnology Industry," NBER Chapters, in: Economic Regulation and Its Reform: What Have We Learned? National Bureau of Economic Research, Inc.
- Hirai, Yuka & Yamanaka, Yosuke & Kusama, Makiko & Ishibashi, Taro & Sugiyama, Yuichi & Ono, Shunsuke, 2012. "Analysis of the success rates of new drug development in Japan and the lag behind the US," Health Policy, Elsevier, vol. 104(3), pages 241-246.
- Santanu Roy & Kamal Saggi, 2012.
"Strategic competition and optimal parallel import policy,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 45(4), pages 1369-1396, November.
- Kamal Saggi & Santanu Roy, 2011. "Strategic Competition and Optimal Parallel Import Policy," Vanderbilt University Department of Economics Working Papers 1117, Vanderbilt University Department of Economics.
- Saradindu Bhaduri & Thomas Brenner, 2011. "Determinants of drug launch delay in pre-TRIPS India: A survival analysis approach," Working Papers on Innovation and Space 2011-05, Philipps University Marburg, Department of Geography.
- Albane Degrassat-Théas & Pascal Paubel & Olivier Parent de Curzon & Claude Pen & Martine Sinègre, 2013. "Temporary Authorization for Use: Does the French Patient Access Programme for Unlicensed Medicines Impact Market Access After Formal Licensing?," PharmacoEconomics, Springer, vol. 31(4), pages 335-343, April.
- Calfee, John E. & DuPr�, Elizabeth & Villarreal, Mario, 2006. "An Exploratory Analysis of Pharmaceutical Price Disparities and Their Implications Among Six Developed Nations," Working paper 534, Regulation2point0.
- Begoña Garcia Mariñoso & Izabela Jelovac & Pau Olivella, 2011.
"External referencing and pharmaceutical price negotiation,"
John Wiley & Sons, Ltd., vol. 20(6), pages 737-756, June.
- Begoña Garcia Mariñoso & Izabela Jelovac & Pau Olivella, 2011. "External referencing and pharmaceutical price negotiation," Post-Print halshs-00303682, HAL.
- Garcia Marinoso, Begona & Jelovac, Izabella & Olivella, Pau, 2011. "External referencing and pharmaceutical price negociation," Economics Papers from University Paris Dauphine 123456789/5987, Paris Dauphine University.
- Y. Wang, 2006. "Price competition in the chinese pharmaceutical market," International Journal of Health Care Finance and Economics, Springer, vol. 6(2), pages 119-129, June.
- Stefan Greß & Jürgen Wasem & Dea Niebuhr, 2006. "Pricing and Reimbursement of Prescription Drugs in German Social Health Insurance," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 4(2), pages 39-47, 07.
- Königbauer, Ingrid, 2006. "Dealing with Rising Health Care Costs: The Case of Pharmaceuticals," Munich Dissertations in Economics 5640, University of Munich, Department of Economics.
- Nebibe Varol & Joan Costa-i-Font & Alistair McGuire, 2011. "Explaining Early Adoption on New Medicines: Regulation, Innovation and Scale," CESifo Working Paper Series 3459, CESifo Group Munich.
- Rosella Levaggi & Michele Moretto & Paolo Pertile, 2013. "The dynamics of pharmaceutical regulation and R&D investments," Working Papers 13/2013, University of Verona, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.