The Pharmaceutical Industry Part 2. Professor Vivian Ho Health Economics Fall 2007. Pharmaceutical Industry Conduct. Pricing Does more intense competition drug prices? Promotion Does drug advertising promote or impede competition? Product innovation
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Professor Vivian Ho
Richard L. Kravitz, MD, MSPH
UC Davis Center for Health Services Research in Primary Care
“ By greatly increasing the likelihood that patients will seek help for their medical problems and receive a safe and effective prescribed medicine, DTC advertising will…play a very real role in enhancing public health.”
-Alan F. Holmer, President, Pharmaceutical Research and Manufacturers of America, JAMA 281:380,1999
“Extending the scope of already ubiquitous promotions about ‘post-nasal drip,’ ‘unsightly rashes,’ or ‘cures for baldness’ has little to do with educating patients or relieving suffering. It will, however, inevitably drain healthcare dollars, dramatically increase unnecessary prescribing, and strain patient-doctor relationships.”
--JR Hoffman and MS Wilkes, BMJ 318:1301, 1999
J. DiMasi, R. Hansen, and H. Grabowski, “The Price of Innovation: New Estimates of Drug Development Costs”, Jan 2002
Does the absence of perfect competition higher prices & restricted output?
*2000 onwards includes prescription drugs and medical supplies.
Price Indext =
The Pharmaceutical industry ranked 7 out of 74 industries with an ROA of 9.9.