Do cost-sharing and entry deregulation curb pharmaceutical innovation?
This paper examines the role of both cost-sharing schemes in health insurance systems and the regulation of entry into the pharmaceutical sector for pharmaceutical R&D expenditure and drug prices. The analysis suggests that both an increase in the coinsurance rate and stricter price regulations...
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Published in: | Journal of health economics Vol. 32; no. 5; pp. 881 - 894 |
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Format: | Journal Article |
Language: | English |
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01-09-2013
Elsevier Sequoia S.A |
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Abstract | This paper examines the role of both cost-sharing schemes in health insurance systems and the regulation of entry into the pharmaceutical sector for pharmaceutical R&D expenditure and drug prices. The analysis suggests that both an increase in the coinsurance rate and stricter price regulations adversely affect R&D spending in the pharmaceutical sector. In contrast, entry deregulation may lead to higher R&D spending of pharmaceutical companies. The relationship between R&D spending per firm and the number of firms may be hump-shaped. In this case, the number of rivals which maximizes R&D expenditure per firm is decreasing in the coinsurance rate and increasing in labor productivity. |
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AbstractList | This paper examines the role of both cost-sharing schemes in health insurance systems and the regulation of entry into the pharmaceutical sector for pharmaceutical R&D expenditure and drug prices. The analysis suggests that both an increase in the coinsurance rate and stricter price regulations adversely affect R&D spending in the pharmaceutical sector. In contrast, entry deregulation may lead to higher R&D spending of pharmaceutical companies. The relationship between R&D spending per firm and the number of firms may be hump-shaped. In this case, the number of rivals which maximizes R&D expenditure per firm is decreasing in the coinsurance rate and increasing in labor productivity. This paper examines the role of both cost-sharing schemes in health insurance systems and the regulation of entry into the pharmaceutical sector for pharmaceutical R&D expenditure and drug prices. The analysis suggests that both an increase in the coinsurance rate and stricter price regulations adversely affect R&D spending in the pharmaceutical sector. In contrast, entry deregulation may lead to higher R&D spending of pharmaceutical companies. The relationship between R&D spending per firm and the number of firms may be hump-shaped. In this case, the number of rivals which maximizes R&D expenditure per firm is decreasing in the coinsurance rate and increasing in labor productivity. [PUBLICATION ABSTRACT] This paper examines the role of both cost-sharing schemes in health insurance systems and the regulation of entry into the pharmaceutical sector for pharmaceutical R&D expenditure and drug prices. The analysis suggests that both an increase in the coinsurance rate and stricter price regulations adversely affect R&D spending in the pharmaceutical sector. In contrast, entry deregulation may lead to higher R&D spending of pharmaceutical companies. The relationship between R&D spending per firm and the number of firms may be hump-shaped. In this case, the number of rivals which maximizes R&D expenditure per firm is decreasing in the coinsurance rate and increasing in labor productivity. |
Author | Grossmann, Volker |
Author_xml | – sequence: 1 givenname: Volker surname: Grossmann fullname: Grossmann, Volker email: volker.grossmann@unifr.ch organization: University of Fribourg, Switzerland |
BackLink | https://www.ncbi.nlm.nih.gov/pubmed/23896384$$D View this record in MEDLINE/PubMed |
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CitedBy_id | crossref_primary_10_1016_j_jeoa_2020_100286 crossref_primary_10_2139_ssrn_3060004 crossref_primary_10_2139_ssrn_2912541 crossref_primary_10_1111_radm_12691 crossref_primary_10_1111_geer_12198 crossref_primary_10_1515_bejeap_2016_0309 crossref_primary_10_1515_fhep_2016_0011 |
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Keywords | Cost-sharing Health insurance Patent breadth I10 Entry deregulation L10 Pharmaceutical innovation O30 |
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SubjectTerms | Coinsurance Control Cost engineering Cost Sharing Deregulation Drug and Narcotic Control - legislation & jurisprudence Drug Costs Drug Discovery Drug Industry - legislation & jurisprudence Economics Entry deregulation Expenditures Health Health administration Health insurance Labor Models, Statistical Patent breadth Patents as Topic Pharmaceutical industry Pharmaceutical innovation Pharmaceuticals Price regulations Productivity Research & development expenditures Studies United States |
Title | Do cost-sharing and entry deregulation curb pharmaceutical innovation? |
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