Impacts of Patent Expiry on Daily Cost of Pharmaceutical Treatments in Eight OECD Countries, 2004--2010

Ernst R. Berndt and Pierre Dubois

International Journal of the Economics of Business, 2016, vol. 23, issue 2, 125-147

Abstract: Variability in regulatory frameworks, industrial policy, physician/pharmacy autonomy, brand/generic distinctions, and the practice of medicine contribute to ambiguous interpretations of cross-country pharmaceutical cost comparisons. Here, we report cross-country comparisons that: (i) focus on ten 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 Organization’s 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.

Date: 2016
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DOI: 10.1080/13571516.2015.1122969

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