Pharmaceutical Prices and Political Activity
Drug prices have been a conspicuous political issue in much of recent history, but no more so than during health care reform debates in 1993 and 1994. This paper investigates possible effects of political activity on pharmaceutical prices, with a particular focus on the health care reform period. It evaluates the extent to which pharmaceutical companies slowed the rates at which they increased prices in an attempt to preempt government intervention. To do so, we characterize companies based on their vulnerability to future price regulation. We then consider patterns in price movements across companies. The results suggest that companies whose drugs had longer patent lives and who had recently increased contributions to their corporate Political Action Committees (PACs) slowed price increases during 1992 and 1994 more than their competitors. It is difficult to distinguish pricing differences across companies in 1993, perhaps because most companies had pledged to keep price increases below the rate of inflation.
|Date of creation:||Sep 2001|
|Date of revision:|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
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.:
- Glenn Ellison & Sara Fisher Ellison, 2011.
"Strategic Entry Deterrence and the Behavior of Pharmaceutical Incumbents Prior to Patent Expiration,"
American Economic Journal: Microeconomics,
American Economic Association, vol. 3(1), pages 1-36, February.
- Glenn Ellison & Sara Fisher Ellison, 2007. "Strategic Entry Deterrence and the Behavior of Pharmaceutical Incumbents Prior to Patent Expiration," NBER Working Papers 13069, National Bureau of Economic Research, Inc.
- Ernst R. Berndt & Linda T. Bui & David H. Lucking-Reiley & Glen L. Urban, 1996.
"The Roles of Marketing, Product Quality, and Price Competition in the Growth and Composition of the U.S. Antiulcer Drug Industry,"
in: The Economics of New Goods, pages 277-328
National Bureau of Economic Research, Inc.
- Ernst R. Berndt & Linda Bui & David Reiley & Glen Urban, 1994. "The Roles of Marketing, Product Quality and Price Competition in the Growth and Composition of the U.S. Anti-Ulcer Drug Industry," NBER Working Papers 4904, National Bureau of Economic Research, Inc.
- Berndt Ernst R. & Cockburn Iain M. & Cocks Douglas L. & Epstein Arnold M. & Griliches Zvi, 1998.
"Is Price Inflation Different for the Elderly? An Empirical Analysis of Prescription Drugs,"
Forum for Health Economics & Policy,
De Gruyter, vol. 1(1), pages 1-45, January.
- Ernst R. Berndt & Iain M. Cockburn & Douglas L. Cocks & Arnold M. Epstein & Zvi Griliches, 1998. "Is Price Inflation Different for the Elderly? An Empirical Analysis of Prescription Drugs," NBER Chapters, in: Frontiers in Health Policy Research, Volume 1, pages 33-76 National Bureau of Economic Research, Inc.
- Ernst R. Berndt & Iain M. Cockburn & Douglas L. Cocks & Arnold Epstein & Zvi Griliches, 1997. "Is Price Inflation Different for the Elderly? An Empirical Analysis of Prescription Drugs," NBER Working Papers 6182, National Bureau of Economic Research, Inc.
- Esty, Daniel C & Caves, Richard E, 1983. "Market Structure and Political Influence: New Data on Political Expenditures, Activity, and Success," Economic Inquiry, Western Economic Association International, vol. 21(1), pages 24-38, January.
- David P. Baron, 1997. "Integrated Strategy and International Trade Disputes: The Kodak-Fujifilm Case," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 291-346, 06.
- Ellison, Sara Fisher & Mullin, Wallace P, 2001. "Gradual Incorporation of Information: Pharmaceutical Stocks and the Evolution of President Clinton's Health Care Reform," Journal of Law and Economics, University of Chicago Press, vol. 44(1), pages 89-129, April.
- Amihai Glazer & Henry McMillan, 1992. "Pricing by the Firm Under Regulatory Threat," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 1089-1099.
- Ernst R. Berndt & Zvi Griliches & Joshua G. Rosett, 1992.
"Auditing the Producer Price Index: Micro Evidence From Prescription Pharmaceutical Preparations,"
NBER Working Papers
4009, National Bureau of Economic Research, Inc.
- Berndt, Ernst R & Griliches, Zvi & Rosett, Joshua G, 1993. "Auditing the Producer Price Index: Micro Evidence from Prescription Pharamceutical Preparations," Journal of Business & Economic Statistics, American Statistical Association, vol. 11(3), pages 251-64, July.
- Block, Michael Kent & Nold, Frederick Carl, 1981. "The Deterrent Effect of Antitrust Enforcement," Journal of Political Economy, University of Chicago Press, vol. 89(3), pages 429-45, June.
- Sara Fisher Ellison, 1998. "What Prices Can Tell Us about the Market for Antibiotics," Working papers 98-10, Massachusetts Institute of Technology (MIT), Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:8482. 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: ()
If references are entirely missing, you can add them using this form.