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Regulation effects on the adoption of new medicines

Costa-Font, Joan, McGuire, Alistair and Varol, Nebibe (2015) Regulation effects on the adoption of new medicines. Empirical Economics, 49 (3). pp. 1101-1121. ISSN 0377-7332

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Identification Number: 10.1007/s00181-014-0903-x

Abstract

This paper analyses the impact of reimbursement regulation on launch times in the adoption of new medicines in a sample of OECD countries and a subsample of European countries. The latter also allows examination of price spillover effects, given that pharmaceutical product reimbursement regulation commonly benchmarks from prices in other countries. We empirically focus on the relative delays imposed by regulation on the adoption of a global set of molecules, which have diffused across more than 10 markets in the OECD over the period 1999-2008, controlling for various confounding effects. Through examining time to launch across a number of markets, and controlling for a number of confounding influences, we find that price and reimbursement regulations appear to delay the adoption of new pharmaceutical products. We also find the existence of interdependencies in pricing may have a further indirect effect of such regulation on launch times. Firm economies of scale, the therapeutic importance of specific product innovations and market size are found to counter the delaying impact of price and reimbursement regulation on new medicines adoption.

Item Type: Article
Official URL: http://link.springer.com/journal/181
Additional Information: © 2015 Springer-Verlag Berlin Heidelberg
Divisions: Social Policy
Centre for Economic Performance
LSE Health
Subjects: H Social Sciences > HV Social pathology. Social and public welfare. Criminology
R Medicine > RA Public aspects of medicine
R Medicine > RS Pharmacy and materia medica
Sets: Departments > Social Policy
Research centres and groups > Centre for Economic Performance (CEP)
Research centres and groups > LSE Health and Social Care
Research centres and groups > LSE Health
Date Deposited: 21 Nov 2014 17:03
Last Modified: 20 Mar 2019 02:38
Funders: Merck Foundation Trust
URI: http://eprints.lse.ac.uk/id/eprint/60229

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