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Financing pharmaceuticals in transition

Kanavos, Panos (1999) Financing pharmaceuticals in transition. Croatian Medical Journal, 40 (June). pp. 244-259. ISSN 0353-9504

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Abstract

This paper (a) provides a methodological taxonomy of pricing, financing, reimbursement, and cost containment methodologies for pharmaceuticals; (b) analyzes complex agency relationships and the health versus industrial policy tradeoff; (c) pinpoints financing measures to balance safety and effectiveness of medicines and their affordability by publicly funded systems in transition; and (d) highlights viable options for policy-makers for the financing of pharmaceuticals in transition. Three categories of measures and their implications for pharmaceutical policy cost containing are analyzed: supply-side measures, targeting manufacturers, proxy demand-side measures, targeting physicians and pharmacists, and demand-side measures, targeting patients. In pursuing supply side measures, we explore free pricing for pharmaceuticals, direct price controls, cost-plus and cost pricing, average pricing and international price comparisons, profit control, reference pricing, the introduction of a fourth hurdle, positive and negative lists, and other price control measures. The analysis of proxydemand measures includes budgets for physicians, generic policies, practice guidelines, monitoring the authorizing behavior of physicians, and disease management schemes. Demand-side measures explore the effectiveness of patient co-payments, the impact of allowing products over-the-counter and health promotion programs. Global policies should operate simultaneously on the supply, the proxy demand, and the demand-side. Policy-making needs to have a continuous long-term planning. The importation of policies into transition economy may require extensive and expensive adaptation, and/or lead to sub-optimal policy outcomes.

Item Type: Article
Official URL: http://www.cmj.hr/
Additional Information: © 1999 Croatian Medical Journal
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
R Medicine > RM Therapeutics. Pharmacology
R Medicine > RS Pharmacy and materia medica
Journal of Economic Literature Classification System: I - Health, Education, and Welfare > I1 - Health > I11 - Analysis of Health Care Markets
Sets: Departments > Social Policy
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 30 Jul 2008 14:51
URL: http://eprints.lse.ac.uk/6930/

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