Working Paper: CEPR ID: DP9140
Authors: Ernst R. Berndt; Pierre Dubois
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.
Keywords: cross-country comparisons; generic drugs; pharmaceutical costs
JEL Codes: D4; I11; I18; L11; L65; O34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| patent expirations (O34) | daily treatment costs (H51) |
| regulatory changes (G18) | treatment costs (Q52) |
| policy changes (J18) | price indexes (C43) |
| patent expirations (O34) | daily treatment costs in pharmacy-driven markets (I11) |
| regulatory changes (G18) | daily treatment costs in pharmacy-driven markets (I11) |
| regulatory changes (G18) | daily treatment costs in physician-driven markets (I11) |