Pharmaceutical Economics and Policy

Stuart O. Schweitzer is Professor of Health Policy and Management at UCLA's Fielding School of Public Health. He has held other academic and research appointments at the Urban Institute and the White House Commission for a National Agenda for the Eighties. His research and consulting activities have dealt with pharmaceutical regulation and policy, health care financing, and technology assessment. Z. John Lu is an Assistant Professor of Economics at the MVS School of Business and Economics, California State University, Channel Islands. Prior to this academic position, Dr. Lu was a health economist in the biopharmaceutical industry for 2 decades, including nearly 17 years at Amgen, where he was a director of global health economics and policy. Professor Lu's research interests include industrial economics and policy on pharmaceuticals, particularly in the United States and China.

Introduction

The Big Picture
The Supply of Pharmaceuticals
The Demand for Pharmaceuticals
Pharmaceutical Prices
International Price Comparisons
Pharmaceutical Marketing
Pharmaceutical Patents
Regulatory Control of the Pharmaceutical Sector
Timing of Pharmaceutical Approvals

Part I. The Industry

Chapter 1 The Pharmaceutical Industry

The Competitive Structure of the Pharmaceutical Industry
Pharmaceutical Research and Development
Pharmaceutical R&D and Prices
The Pharmaceutical Research and Approval Process
Product Liability
Increasing Private Sector Research Activity
Drugs for Low-Income Countries
The Role of Pharmaceutical Marketing in Prescribing Decisions
Conclusions

Chapter 2 The Biotechnology Industry

Background
What is Biotechnology?
A Brief History of Modern Biotechnology Industry
Factors Distinguishing the Biotechnology from the Pharmaceutical Industry
Case Studies of Biotechnology Firm Growth and Failure
Conclusion

Chapter 3 Generics and Biosimilars

Introduction
A Brief History of Modern Generic Pharmaceutical Industry in the US
The Structure of the Generic Pharmaceutical Industry
Generic Entry and Price Competition in the Pharmaceutical Marketplace
Generic Entry and Strategic Behavior
Drug Shortage
Economic Analysis of Drug Shortage
The Emergence of Biosimilars
Conclusion

Chapter 4 The Global Pharmaceutical Industry

Geographic Patterns of Pharmaceutical Production and Sales
International Trade in Pharmaceutical Products
Pharmaceutical Research and Development: An International View
Does Government Drug Price Setting Influence R&D?
Global Mergers and Acquisitions
The Pharmaceutical Industry in Selected Countries and Regions
The Chinese Pharmaceutical Industry
Access to Appropriate Drugs in Developing Countries

Part II. The Consumer

Chapter 5 The Demand for Pharmaceuticals

The Problem of Drug Expenditures
How is Demand Determined?
Pharmaceuticals and Other Health Services: Substitutes or Complements?
The Changing Structure of the Pharmaceutical Market
Conclusion

Chapter 6 The Demand for Pharmaceuticals in Major International Markets

Comparison of Pharmaceutical Spending across Global Markets
Comparison of Pharmaceutical Consumption across Global Markets
Demand for Pharmaceuticals in Japan
Demand for Pharmaceuticals in China
Demand for Pharmaceuticals in France and Germany
Demand for Pharmaceuticals in the United Kingdom
Demand for Pharmaceuticals in Canada
Demand for Pharmaceuticals in Brazil
Conclusion

Part III. Pricing and Marketing of Pharmaceutical Products

Chapter 7 Pharmaceutical Prices

The Problem of Pharmaceutical Prices
Pharmaceutical Prices Over Time
Measuring Drug Prices: What Prices?
Measuring Drug Prices: Rate of Change
How Are Drug Prices Determined?
Economic Models from Industrial Organization Literature
Market Power, Generic Entry and Pricing

Chapter 8 Economic Evaluation of New Drugs

Optimizing Production of Health
Cost-Benefit Analysis
Cost-Effectiveness Analysis
Cost-Utility Analysis
Cost-Effectiveness League Table
Policy Applications
Conclusions

Chapter 9 Pricing Pharmaceuticals in a World Environment

Why Do Drug Prices Vary Across Country?
Comprehensive Comparison of International Drug Prices
Policy Implications
Conclusion

Chapter 10 Pharmaceutical Marketing

Size of the Pharmaceutical Promotion Effort
Pharmaceutical Promotion Directed at Healthcare Providers
Pharmaceutical Promotion Aimed at Patients: Direct-to-Consumer Advertising (DTCA)
Pharmaceutical Promotion to Third-Party Payers
Regulation of Prescription Pharmaceutical Promotion
False and Misleading Claims
Off-Label Promotion
Conclusion

Part IV. Public Policies in the Pharmaceutical Market

Chapter 11 Patent Protection

Introduction
Patent Law
Patentability
Patent Categories
How Patents Are Obtained?
What Protection Does a Patent Confer?
Duration of Patent Protection
Infringement of Patents
Strategic Responses by Pharmaceutical Firms
International Patent Treaties
Patent Procedures under International Conventions
Criticisms of the Patent System
Patent and Societal Choice

Chapter 12 Drug Approval Process in the United States

The Drug Approval Process in the United States
The Rising Cost of Pharmaceutical R&D
Major Drug Legislations in the United States
Annual NME Approvals by FDA since 2000
Regulatory Approval of Generic Drugs in the US
Regulatory Approval of Biosimilars in the US

Chapter 13 Pharmaceutical Regulation in the European Union

The European Union
Move Toward a Single Market
History of Drug Regulation in Europe
Structure and Role of the European Medicines Agency
Drug Review under the European Medicines Agency
EU Rules on Labeling of Medicinal Products
Regulations of Drug Advertising
Pharmacovigilance
Approval of Generic Drugs in the European Union
Approval of Biosimilars in the European Union
Comparison of International Drug Approval Lags

Chapter 14 Pharmaceuticals and Public Policy: A Look Ahead

Industry Structure
The Nascent Biosimilar Sector
Personalized Medicine and Digital Healthcare Information
Artificial Intelligence and Medicine
Outpatient Bundled Payment Program and Pharmaceuticals
Pharmaceutical Prices
The FDA
Conclusion