Do cost-sharing and entry deregulation curb pharmaceutical innovation?

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper examines the role of both cost-sharing schemes in health insurance systems and entry regulation for pharmaceutical R&D expenditure, drug prices, aggregate productivity, and income. The analysis suggests that both an increase in the coinsurance rate and stricter price regulations adversely affect R&D spending in the pharmaceutical sector. In contrast, entry deregulation may lead to quality-improvements of pharmaceuticals, despite reducing price-setting power of pharmaceutical companies. Extension to an endogenous growth context suggests that, when individual labor supply depends on health status, both cost-sharing and entry barriers in the pharmaceutical sector also affect aggregate productivity and wage rates. Terms of use: Documents in EconStor mayJEL-Code: I100, L100, O300.

Optimal Social Insurance and Health Inequality

“…In a recent paper,Grossmann (2013) studies the role of institutional regulations in the pharmaceutical sector and co-insurance schemes in the health system on pharmaceutical innovations. However, he does not capture the interactions with the social security system and does not endogenize life expectancy.…”

R&D-Driven Medical Progress, Health Care Costs, and the Future of Human Longevity

“…The interaction of health R&D and health expenditure is also investigated in a couple of related papers, albeit only in "reduced form" by either assuming a direct utility gain from the consumption of pharmaceuticals (as in Garber, Jones andRomer, 2006, andGrossmann, 2013) or by assuming a direct impact of health good consumption on the mortality rate of a representative individual (as in Jones, 2016b). Garber et al (2006) investigate the interaction between medical R&D of a monopolist and the generosity of the health care system, measured by the degree of coinsurance payment of individuals.…”

“…In a similar vein,Grossmann (2013) relates co-insurance rates to medical R&D incentives. By examining an oligopolistic pharmaceutical market with endogenous firm entry, he also shows that entry deregulation may lead to more pharmaceutical R&D despite lowering profits of pharmaceutical firms.…”

Patentes Farmacêuticas e Biofarmacêuticas: A Oportunidade Dos Países Farmaemergentes

“…A indústria farmacêutica destaca-se por ser um dos segmentos mais rentáveis comercialmente, sendo de inquestionável importância para a movimentação da economia mundial. Além disso, é um setor caracterizado pelo grande dinamismo e necessidade constante de inovação, exigindo elevados investimentos em Pesquisa e Desenvolvimento (P&D) (KAITIN, 2010;GROSSMANN, 2013; GONZÁLEZ; MACHO-STADLER; PÉREZ-CASTRILLO, 2016; LORENZINI; MOSTAGHEL; HELLSTRÖM, 2018). Complementarmente, o avanço da ciência e tecnologia, especialmente na área biotecnológica, permitiu que uma nova classe de fármacos, conhecidos como biofármacos, fosse desenvolvida mais arduamente e seu uso implementado para o tratamento de doenças complexas, como câncer, artrite reumatóide e outras doenças autoimunes (HU; MCNAMARA; MCLOUGHLIN, 2015; LAVARELLO; GOLDSTEIN; PITA, 2017).…”