Pharmaceutical Economics and Policy

Front Cover
Oxford University Press, USA, 2007 - Medical - 336 pages
The pharmaceutical industry is praised as a world leader in high technology innovation and the creator of products that increase both longevity and quality of life for people throughout the world. At the same time, the industry is also criticized for its marketing and pricing practices and for its apparent anticompetitive responses to generic competition. Even its research and development priorities are criticized as being too closely driven by the goal of maximizing shareholder value, rather than the health of the public. Unfortunately, many of the critics of the industry fail to understand the complexities of the industry and its role in the nations healthcare system. This book uses the tools of economic analysis to explore the conflicting priorities and aims of the pharmaceutical industry, from both an American and worldwide perspective.This is the second edition of a uniquely comprehensive and balanced discussion of pharmaceutical policy issues. All the chapters of the former edition have been fully re-written and extensively updated.In addition, the book includes six new chapters on emerging topics such as the broadened role of FDA regulations and the increasing diversity of the industry. An entire chapter is devoted to the biotechnology industry and one to alternative medicines, often called "nutraceuticals." Another new chapter discusses segments of the industry that specialize in particular activities including generic drugs and drug delivery systems. The recent controversial expansion of Medicare to cover outpatient drugs is discussed in depth. The introduction is also updated to address the volatile pace of pharmaceutical innovation and how the pharmaceutical industry has responded to the emergence of managed care.
 

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Contents

The Industry
19
The Pharmaceutical Industry
21
Pharmaceutical Research and Development
22
The Competitive Structure of the Pharmaceutical Industry
23
Pharmaceutical Research and Development and Prices
27
The Pharmaceutical Research Process
29
Product Liability
38
Conclusions
40
The Timing of Drug Approvals in the United States and Abroad
191
The Timing of Pharmaceutical Approvals and Health Policy
192
The Drug Approval Process in the United States
193
Recent Initiatives to Expedite Drug Approvals
198
Is There a US Drug Lag?
199
Intervention in the Pharmaceutical Market Public and Private
207
Pharmaceutical Regulation and Cost Containment by the Public Sector
209
Evolution of the US Food and Drug Administration
210

The Biotechnology Industry
44
Product Development in the Biotechnology Industry
47
The Natural History of Biotech Firms
48
Case Studies of Alliances
53
Regulation
55
Case Studies of Biotechnology Firm Growth
57
Conclusions
60
Other Firms in the Pharmaceutical Industry
63
Outsourcing Firms
68
Conclusions
78
Marketing Pharmaceuticals
82
Size of the Marketing Effort
85
Types of Promotion
87
Disguising Marketing as Research
93
Marketing in an Era of Managed Care
94
Pharmacy Benefit Managers
95
DirecttoConsumer Advertising
97
OvertheCounter Drugs
100
Joint Marketing
103
Roles of the US Food and Drug Administration in Marketing
104
False and Misleading Claims
105
The Consumer
113
The Demand for Pharmaceuticals
115
How Is Demand Determined?
116
The Changing Structure of the Pharmaceutical Market
117
Conclusions
131
The Market
135
Pharmaceutical Prices
137
The Problem of Pharmaceutical Prices
138
Pharmaceutical Prices over Time
139
Measuring Drug Prices
141
How Are Drug Prices Determined?
143
Cost Structure of Pharmaceutical Firms
144
Is the Pharmaceutical Industry Monopolistic?
149
How Drug Quality Influences Price
153
The Worldwide Market for Pharmaceuticals
157
Geographic Patterns of Pharmaceutical Production and Sales
158
An International View
159
Does Government Drug Price Setting Influence RD?
166
Worldwide Manufacturing and Sales
167
Access to Appropriate Drugs in Developing Countries
170
Effect of the World Trade Organization Treaty
173
Pricing Pharmaceuticals in a World Environment
177
Why Do Drug Prices Vary across Country?
178
Comparisons of International Drug Prices
180
How Do We Measure Drug Prices across Countries?
184
Why Drug Price Differences Persist
186
Medicaid
211
State CostContainment Efforts
213
Medicare
214
Regulation by the Private Sector
222
Cost Containment in Managed Care
230
Pharmaceutical Regulation in Europe
238
History of Regulation in Europe
239
Move Toward a Single Market
240
Drug Review under the European Medicines Evaluation Agency
241
Current Regulatory Structure
242
The Centralized Procedure for Marketing Authorization
243
The MutualRecognition Procedure
245
Performance of Europes Centralized Drug Approval
246
Rules on Labeling of Medicinal Products
247
Advertising Regulations
248
Generic Drugs
249
Patent Protection
252
Patent Law
253
Patentability and Patent Categories
254
How Are Patents Obtained?
255
What Protection Does a Patent Confer?
256
Infringement of Patents
258
Patent Procedures under International Conventions
260
Patents and Societal Choice
261
Evaluating New Drugs
263
CostBenefit Analysis
266
CostEffectiveness Analysis
270
CostUtility Analysis
272
Policy Applications
274
Interpretation and Misinterpretation of CostEffectiveness Studies
277
Complementary and Alternative Medicines
280
Who Uses Complementary and Alternative Medicines?
282
Dietary Supplements
283
Food Additives
293
Medical Foods
296
Concluding Remarks on Complementary and Alternative Medicine
300
Pharmaceuticals and Health Policy A Look Ahead
304
Health System Reform
306
Drug Prices
308
Patent Protection
309
Drug Approvals
310
Managed Care and Restricted Access to Pharmaceuticals
311
The US Food and Drug Administration
313
Genetically Targeted Drugs
314
Conclusions
315
Index
317
Copyright

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About the author (2007)

Stuart O. Schweitzer is Professor of Health Economics in the Department of Health Services at the University of California, Los Angeles.

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