Advanced Search
MyIDEAS: Login to save this paper or follow this series

Pharmaceutical Pricing in a Globalized World: Crossing the income divide and ability to pay

Contents:

Author Info

  • Rutger P. Daems

    (Planet Strategy Group, Brussels, Belgium)

  • Edith L. Maes

    (Maastricht School of Management, PO Box 1203, 6201 BE Maastricht, The Netherlands; E-mail address: edith.maes@telenet.be)

  • Christoph Glaetzer

    (Janssen Asia Pacific, Singapore)

Registered author(s):

    Abstract

    OBJECTIVES To examine pharmaceutical pricing strategies not only through the lens of efficiency but equity as well, and propose analytic methods that support policymakers and executives in making pricing and reimbursement decisions. METHODS The paper takes a 3-dimensional approach (triangulation) in defining international pricing policy for pharmaceuticals using: cost-effectiveness analysis (CEA), willingness to pay analysis (WTP), and ability to pay analysis (ATP). It attempts to find a balance between various economic methods of which some focus on effectiveness while others are geared towards incorporating equity in the equation. RESULTS A model has been developed to assess the ATP of 120 countries based on a country’s score in the human development index (HDI) as defined and measured by the United Nations Development Program, and published annually in the United Nations Human Development Report. The non-linear index has been applied to a number of drugs in different therapeutic categories without disclosing brand names. Prices in affluent countries – and to an increasing extent in the fast-growing middleincome countries – could generate sufficient revenue to pay for the cost of innovation benefiting all parties, whereas prices in the lowest-income countries in principle need only cover their marginal cost. CONCLUSIONS Besides the standard cost-effectiveness analysis (CEA) and willingness to pay analysis (WTP), a third method should be used in conjunction that measures the ability to pay (ATP) with the HDI index as yardstick. We recommend that ATP becomes an additional practice in policy decision-making and in defining international pricing strategies for pharmaceuticals in order to provide sustainable access to medicines.

    Download Info

    If 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.
    File URL: http://web2.msm.nl/RePEc/msm/wpaper/MSM-WP2012-24.pdf
    File Function: First version, 2012
    Download Restriction: no

    Bibliographic Info

    Paper provided by Maastricht School of Management in its series Working Papers with number 2012/24.

    as in new window
    Length: 17 pages
    Date of creation: Sep 2012
    Date of revision:
    Handle: RePEc:msm:wpaper:2012/24

    Contact details of provider:
    Postal: P.O. Box 1203, 6201 BE Maastricht
    Phone: +31 43 387 08 08
    Fax: +31 43 387 08 00
    Email:
    Web page: http://research.msm.nl
    More information through EDIRC

    Related research

    Keywords: Access-to-medicines; international pricing; cost-effectiveness; willingness-to-pay; ability-to-pay; equity.;

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    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.:
    as in new window
    1. Daems, Rutger & Maes, Edith & Ramani, Shyama V., 2011. "Global Framework for Differential Pricing of Pharmaceuticals," MERIT Working Papers 054, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:msm:wpaper:2012/24. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maud de By).

    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.