Biotechnology Drugs, Traditional Pharmaceuticals and International Price Controls
- Presenter:
Chair: Ernst R. Berndt Mon June 5, 2006 10:45-12:15 Room 335
In recent years the U.S. share of worldwide pharmaceutical expenditures has increased from about one-third to one-half, partly because of the imposition of price controls in all advanced economies other than the U.S. This has raised questions about the rewards to new drug development, the bulk of which is performed by profit-seeking private firms. At the same time, the advent of biotechnology has generated new drugs that in comparison to traditional pharmaceuticals are more tightly targeted at biological mechanisms, less susceptible to competition, and possibly less susceptible to price controls. Using a data based that includes prices and volumes of individual drugs (both biotech and traditional) across six industrialized nations, this paper explores the impact of biologically targeted drugs on foreign price controls and foreign adoption of new drugs. We also suggest implications for pharmaceutical reimbursement and costs in the U.S.
