| 1 | Introduction | 1 |
| 2 | The Economics of Pharmaceutical Costs and Pricing | 5 |
| The Cost Structure of Innovative Pharmaceuticals | 5 |
| The Economics and Politics of Drug Price Regulation | 9 |
| Optimal Pricing to Share Joint Costs | 11 |
| Summary | 13 |
| 3 | Regulation of Pharmaceutical Prices and Expenditures | 15 |
| The Objectives of Price Regulation | 15 |
| Forms of Price Regulation | 16 |
| 4 | Effects of Regulation on Drug Prices and Expenditures | 30 |
| Price Indexes | 30 |
| Growth in Drug Expenditures | 37 |
| Volume per Capita | 39 |
| Mix of Drugs | 41 |
| Conclusion | 45 |
| 5 | Effects of Regulation on Innovation | 46 |
| Innovation Strategies of the Pharmaceutical Firm | 47 |
| Revenue Effects of Regulation | 49 |
| Effects of Regulation on the Cost of Capital | 56 |
| Effects on Domestic and Foreign Firms | 56 |
| Empirical Evidence | 58 |
| Conclusions | 63 |
| 6 | Effects of Regulation on Productivity | 65 |
| Incentive Effects of Biased Regulation | 66 |
| Data and Empirical Methods | 68 |
| Empirical Results | 69 |
| Conclusions | 80 |
| 7 | Cross-national Multiplier Effects of Regulation | 84 |
| Welfare Implications of Parallel Trade | 85 |
| Policy Options | 89 |
| 8 | Conclusions | 92 |
| References | 99 |
| Index | 103 |
| About the Author | |
| Tables | |
| 2-1 | The Cost Structure of Pharmaceuticals: Discounted Present Value at Launch | 6 |
| 4-1 | Price Indexes in Selected Countries, Relative to the United States, 1992 | 31 |
| 4-2 | Growth in Real per Capita Expenditures on Pharmaceuticals in Selected Countries, 1970-1990 | 38 |
| 4-3 | Drug Volume per Capita in Selected Countries, 1981-1990 | 40 |
| 4-4 | Markets for Single-Molecule Cardiovascular Products (Outpatient Pharmacy) in Selected Countries, 1992 | 43 |
| 5-1 | R&D Share of Sales in Selected Countries, Relative to the United States, 1981-1991 | 61 |
| 6-1 | Growth in Number of Employees in Selected Countries, 1975-1990 | 70 |
| 6-2 | Value Added per Employee in Selected Countries, Relative to the United States, 1970-1990 | 72 |
| 6-3 | Value Added per Employee in Selected Countries, Relative to the United States, 1981-1990 | 73 |
| 6-4 | Growth in Gross Fixed Capital Formation in Selected Countries, 1975-1990 | 74 |
| 6-5 | Growth in Gross Fixed Capital Formation per Employee in Selected Countries, 1975-1990 | 75 |
| 6-6 | Labor Compensation per Employee in Selected Countries, Relative to the United States, 1970-1990 | 77 |
| 6-7 | Hypothetical Ex Post Return to Physical Capital, Assuming No Intangible Capital, 1976-1990 | 79 |
| Figures | |
| 4-1 | Price per Standard Unit in Selected Countries, Relative to the United States | 35 |
| 5-1 | Growth in Real R&D Expenditures in Selected Countries, 1981-1991 | 59 |
loading...