Document Type
Conference Proceeding
Publication Date
6-2005
Abstract
As rising health care expenditures focus government attention on slowing the growth, the pharmaceutical industry comes under increasing pressure to curb prices of ethical drugs. Pharmaceutical price regulations have been implemented in many countries to control pharmaceutical expenditures. Yet, creating innovative drugs requires enormous R&D costs, which in turn require adequate expected economic returns. Since price controls reduce profits and expected returns, as countries invoke stricter price regulations, firms will either move their R&D process into less regulated markets or move out of innovative R&D. This paper assesses the impact of drug price regulations in Japan compared to market-priced drugs in the US on pharmaceutical innovation.
Recommended Citation
O'Neill, Heather M. and Crain, Lena Clarissa, "The Effects of Price Regulation on Pharmaceutical R&D and Innovation" (2005). Business and Economics Faculty Publications. 5.
https://digitalcommons.ursinus.edu/bus_econ_fac/5
Included in
Economics Commons, Food and Drug Law Commons, Organizational Behavior and Theory Commons, Pharmacoeconomics and Pharmaceutical Economics Commons
Comments
Originally published in Proceedings of the Pennsylvania Economic Association 2005 Conference held June 2-4, 2005, at Millersville University.