Reference

Ernst R. Berndt, and Pierre Dubois, Impacts of Patent Expiry and Regulatory Policies on Daily Cost of Pharmaceutical Treatments: OECD Countries, 2004-2010, IDEI Working Paper, n. 702, March 2012.

Abstract

Cross-country variability in regulatory frameworks, industrial policy, physician/pharmacy autonomy, brand/generic distinctions, and in the practice of medicine contributes to ambiguous interpretations of pharmaceutical cost comparisons. Here we report cross-country comparisons that: (i) focus on 11 therapeutic classes experiencing patent expiration and loss of exclusivity 2004-2010 in eight industrialized countries; (ii) convert revenues and unit sales to cost per day of treatment and number patient days treated using the World Health Organizations’ Defined Daily Dosage metrics; (iii) compare patterns in costs per day of treatment with price index measures based on average price per day of treatment for each molecule computed over all molecule versions; (iv) utilizing econometric methods, model and quantify various factors affecting variations in daily treatment price indexes such as national regulatory and reimbursement policy changes, physician/pharmacy autonomy, and other factors; and (v) simulate changes in expenditures by country and therapeutic class had counterfactual policies been implemented.

JEL codes

  • D4: Market Structure and Pricing
  • I11: Analysis of Health Care Markets
  • I18: Government Policy • Regulation • Public Health
  • L11: Production, Pricing, and Market Structure • Size Distribution of Firms
  • L65: Chemicals • Rubber • Drugs • Biotechnology
  • O34: Intellectual Property and Intellectual Capital