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Making profits working on patients’ expectations, a behavioral analysis of pharmaceutical clinical research

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  • Roberto Ippoliti

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Abstract

This paper presents a model that demonstrates how pharmaceutical companies can make profits from human experimentation by working on patients’ expectations and physicians’ inability to evaluate innovations in medical knowledge. In order to understand how profits can be made, it is important to analyze the effect the physician’s expectations have on patients, both in the enrolment process and in the collected effectiveness, as well as the nature of the physician’s interest in producing this effect. Starting from the process through which companies collect clinical evidence, the analysis will focus on the economic use of that data on the drug market and the national drug agency’s role. A model illustrates the companies’ potential opportunistic strategies as well as what the public stakeholder’s target should be. Is public intervention really necessary in order to regulate the imperfect market of drugs? In other words, taking imperfection due to the expectation process in human experimentation into account, is there another practicable path? The final normative analysis will try to answer these questions. Copyright Springer Science+Business Media, LLC. 2012

Suggested Citation

  • Roberto Ippoliti, 2012. "Making profits working on patients’ expectations, a behavioral analysis of pharmaceutical clinical research," Journal of Bioeconomics, Springer, vol. 14(3), pages 217-241, October.
  • Handle: RePEc:kap:jbioec:v:14:y:2012:i:3:p:217-241
    DOI: 10.1007/s10818-011-9121-1
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    File URL: http://hdl.handle.net/10.1007/s10818-011-9121-1
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    References listed on IDEAS

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    1. Roberto Ippoliti, 2013. "The market of human experimentation," European Journal of Law and Economics, Springer, vol. 35(1), pages 61-85, February.
    2. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    3. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    4. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
    5. Anup Malani, 2006. "Identifying Placebo Effects with Data from Clinical Trials," Journal of Political Economy, University of Chicago Press, vol. 114(2), pages 236-256, April.
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    Citations

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    Cited by:

    1. Roberto Ippoliti & Greta Falavigna, 2013. "Subjects’ decision-making process: an empirical analysis on patients’ mobility process and the role of pharmaceutical clinical research," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 60(3), pages 319-342, September.

    More about this item

    Keywords

    Pharmaceutical R&D; Human experimentation; Institutional Review Board; Informed Consent; Drug agency; Medical researcher and research subject; I11;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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