Pharmaceutical Economics and Public Policy

Get a comprehensive explanation of the key economic concepts on how the pharmaceutical market functions The pharmaceutical industry has come under intense public scrutiny for the perception of product prices being too high and for concerns about research and development spending. Pharmaceutical Economics and Public Policy carefully explains the fundamentals of pharmaceutical economics while examining spending, costs, rates of return, and policies affecting the industry. This text provides a comprehensive economic analysis of the most important dimensions of the pharmaceutical market with easy-to-understand analysis of the implications of public policy. Key economic concepts necessary for understanding how the pharmaceutical market functions are clearly explained in detail. Though it is a manufacturing industry, the pharmaceutical industry has several economic aspects that make it fundamentally different from any other. Pharmaceutical Economics and Public Policy takes these sometimes confusing and difficult economic aspects within this unique industry and makes them understandable. The book is carefully referenced and includes numerous figures and tables to clearly present data. Topics in Pharmaceutical Economics and Public Policy include: policymaking—self-interest vs. public interest a pharmaceutical market overview empirical data on cost effectiveness of pharmaceutical use the economics and politics of the regulatory process the economics of patent policies pharmaceutical cost structure why price discrimination occurs in patented pharmaceuticals governmental price controls R&D expenditures sales and marketing expenditures rates of profitability in the pharmaceutical industry mergers and acquisitions and the connection to higher risk levels the future of the pharmaceutical industry Pharmaceutical Economics and Public Policy is an invaluable resource for educators, graduate students, policymakers, legislators, policy analysts, government agencies, and trade associations involved with pharmaceuticals.

Table of Contents:
List of Tables List of Figures Preface Chapter 1. The Public Choice Model of Policymaking Introduction Theories of the Effects of Public Policy Initiatives Applications of Theory to the Pharmaceutical Sector Recent Legislative History Summary Chapter 2. An Overview of the Pharmaceutical Marketplace Introduction Market Structure Market Conduct Market Performance Do Pharmaceuticals Improve Health Status and Are They Cost-Effective? Profitability in the Industry Summary Chapter 3. Government Regulation and the Food and Drug Administration Introduction The Regulatory Process The Nature of Incentives in the Regulatory Process Costs and Benefits of the Regulatory Process Summary Chapter 4. Patent Policies Analytic Dimensions of the Patent System The Economics of the Patent System Direct Price Controls Reference Pricing Parallel Trade Compulsory Licensing Summary Chapter 5. The Cost Structure of the Pharmaceutical Industry Introduction Current Cost Data The Nature of Costs The Economic Concept of Cost Applied to the Pharmaceutical Industry Summary Chapter 6. The Demand for Pharmaceuticals Introduction The Production Function for Health Demand Theory Health Insurance Price Discrimination Summary Chapter 7. Government Health Insurance Programs and the Demand for Pharmaceuticals Introduction Government-Financed Demand Market Posted Prices for Pharmaceuticals to the Various Demanders Medicaid Expenditures for Prescription Drugs The Medicaid Rebate Medicare Coverage of Prescription Drugs Summary Chapter 8. Research and Development Expenditures Introduction Pharmaceutical R & D Expenditures Over Time The Early Time-Profile in the Life of Pharmaceuticals Cash-Flow Profiles Summary Chapter 9. Sales and Marketing Expenditures Introduction Trends in Sales and Marketing The Economic Literature on Advertising Market Power Model Information Model The Economics of the Marketing and Advertising An Economic Model of the Effects of Advertising Summary Chapter 10. Industry Profitability Introduction Normal Profits and Economic Profits Nonprofit Versus For-Profit Forms of Enterprise The Calculation of Profitability Summary Chapter 11. Mergers and Acquisitions Introduction Why Do Companies Merge? Trends in Mergers in the Pharmaceutical Industry Theoretical Aspects of Merger Do Mergers in the Pharmaceutical Industry Serve a Useful Purpose? The Efficient Markets Hypothesis The Empirical Evidence on the Effects of Mergers Summary Chapter 12. Looking Into the Future Introduction The Interaction of the Principal Actors in Pharmaceuticals The Recent Past in Biological Discovery Future Developments The Compression of Morbidity The Emergence of the Biotechnological-Pharmaceutical Industry Summary Appendix A Notes References Index