Financial Effects of Pharmaceutical Price Regulation on R&D Spending by EU versus US Firms
EU countries closely regulate pharmaceutical prices, whereas theUS does not. This paper shows how price constraints affect the profitability, stock returns and R&D spending of EU and US firms. Compared with EU firms, US firms are more profitable, earn higher stock returns and spend more on R&...
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| Veröffentlicht in: | PharmacoEconomics 2010-01, Vol.28 (8), p.615-628 |
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| creator | Golec, Joseph Vernon, John A. |
| description | EU countries closely regulate pharmaceutical prices, whereas theUS does not.
This paper shows how price constraints affect the profitability, stock returns and R&D spending of EU and US firms. Compared with EU firms, US firms are more profitable, earn higher stock returns and spend more on R&D.
We tested the relationship between price regulation and R&D spending, and estimated the costs of tight EU price regulation. Although results show that EU consumers enjoyed much lower pharmaceutical price inflation, we estimated that price controls cost EU firms 46 fewer new medicines and 1680 fewer research jobs during our 19-year sample period.
Had theUS used controls similar to those used in the EU,we estimate itwould have led to 117 fewer new medicines and 4368 fewer research jobs in the US. |
| doi_str_mv | 10.2165/11535580-000000000-00000 |
| format | Article |
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This paper shows how price constraints affect the profitability, stock returns and R&D spending of EU and US firms. Compared with EU firms, US firms are more profitable, earn higher stock returns and spend more on R&D.
We tested the relationship between price regulation and R&D spending, and estimated the costs of tight EU price regulation. Although results show that EU consumers enjoyed much lower pharmaceutical price inflation, we estimated that price controls cost EU firms 46 fewer new medicines and 1680 fewer research jobs during our 19-year sample period.
Had theUS used controls similar to those used in the EU,we estimate itwould have led to 117 fewer new medicines and 4368 fewer research jobs in the US.</description><identifier>ISSN: 1170-7690</identifier><identifier>EISSN: 1179-2027</identifier><identifier>DOI: 10.2165/11535580-000000000-00000</identifier><identifier>PMID: 20617857</identifier><language>eng</language><publisher>Cham: Springer International Publishing</publisher><subject><![CDATA[Biological and medical sciences ; Biomedical Research - economics ; Consumer Price Index ; Consumers ; Cost control ; Cost Control - legislation & jurisprudence ; Costs and Cost Analysis - economics ; Drug Industry - economics ; Drug-cost ; Economic aspects ; Economic theory ; Economics, Pharmaceutical ; Election results ; European Union - economics ; Evaluation ; Fees, Pharmaceutical - legislation & jurisprudence ; Government Regulation ; Health Administration ; Health Economics ; Health technology assessment ; Inflation ; Inflation (Finance) ; Leading Article ; Medicaid ; Medical sciences ; Medicine ; Medicine & Public Health ; Miscellaneous ; Pharmaceutical industry ; Pharmaceutical Preparations - economics ; Pharmaceutical Preparations - supply & distribution ; Pharmacoeconomics and Health Outcomes ; Pharmacology. Drug treatments ; Presidential elections ; Price control ; Price regulations ; Prices and rates ; Pricing ; Public Health ; Public health. Hygiene ; Public health. Hygiene-occupational medicine ; Quality of Life Research ; Regulation ; Research & development expenditures ; Research-and-development. ; Studies ; United States ; Wage & price controls]]></subject><ispartof>PharmacoEconomics, 2010-01, Vol.28 (8), p.615-628</ispartof><rights>Adis Data Information BV 2010</rights><rights>2015 INIST-CNRS</rights><rights>COPYRIGHT 2010 Wolters Kluwer Health, Inc.</rights><rights>COPYRIGHT 2010 Springer</rights><rights>Copyright Wolters Kluwer Health Adis International Aug 2010</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c544t-4d4d2e2630f0979c73bd745ace7801dd7fd1f68be0a55f511fe2ab00edf72f0f3</citedby><cites>FETCH-LOGICAL-c544t-4d4d2e2630f0979c73bd745ace7801dd7fd1f68be0a55f511fe2ab00edf72f0f3</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktopdf>$$Uhttps://link.springer.com/content/pdf/10.2165/11535580-000000000-00000$$EPDF$$P50$$Gspringer$$H</linktopdf><linktohtml>$$Uhttps://link.springer.com/10.2165/11535580-000000000-00000$$EHTML$$P50$$Gspringer$$H</linktohtml><link.rule.ids>314,776,780,3994,27901,27902,41464,42533,51294</link.rule.ids><backlink>$$Uhttp://pascal-francis.inist.fr/vibad/index.php?action=getRecordDetail&idt=23242317$$DView record in Pascal Francis$$Hfree_for_read</backlink><backlink>$$Uhttps://www.ncbi.nlm.nih.gov/pubmed/20617857$$D View this record in MEDLINE/PubMed$$Hfree_for_read</backlink><backlink>$$Uhttp://econpapers.repec.org/article/wkhphecon/v_3a28_3ay_3a2010_3ai_3a8_3ap_3a615-628.htm$$DView record in RePEc$$Hfree_for_read</backlink></links><search><creatorcontrib>Golec, Joseph</creatorcontrib><creatorcontrib>Vernon, John A.</creatorcontrib><title>Financial Effects of Pharmaceutical Price Regulation on R&D Spending by EU versus US Firms</title><title>PharmacoEconomics</title><addtitle>Pharmacoeconomics</addtitle><addtitle>Pharmacoeconomics</addtitle><description>EU countries closely regulate pharmaceutical prices, whereas theUS does not.
This paper shows how price constraints affect the profitability, stock returns and R&D spending of EU and US firms. Compared with EU firms, US firms are more profitable, earn higher stock returns and spend more on R&D.
We tested the relationship between price regulation and R&D spending, and estimated the costs of tight EU price regulation. Although results show that EU consumers enjoyed much lower pharmaceutical price inflation, we estimated that price controls cost EU firms 46 fewer new medicines and 1680 fewer research jobs during our 19-year sample period.
Had theUS used controls similar to those used in the EU,we estimate itwould have led to 117 fewer new medicines and 4368 fewer research jobs in the US.</description><subject>Biological and medical sciences</subject><subject>Biomedical Research - economics</subject><subject>Consumer Price Index</subject><subject>Consumers</subject><subject>Cost control</subject><subject>Cost Control - legislation & jurisprudence</subject><subject>Costs and Cost Analysis - economics</subject><subject>Drug Industry - economics</subject><subject>Drug-cost</subject><subject>Economic aspects</subject><subject>Economic theory</subject><subject>Economics, Pharmaceutical</subject><subject>Election results</subject><subject>European Union - economics</subject><subject>Evaluation</subject><subject>Fees, Pharmaceutical - legislation & jurisprudence</subject><subject>Government Regulation</subject><subject>Health Administration</subject><subject>Health Economics</subject><subject>Health technology assessment</subject><subject>Inflation</subject><subject>Inflation (Finance)</subject><subject>Leading Article</subject><subject>Medicaid</subject><subject>Medical sciences</subject><subject>Medicine</subject><subject>Medicine & Public Health</subject><subject>Miscellaneous</subject><subject>Pharmaceutical industry</subject><subject>Pharmaceutical Preparations - economics</subject><subject>Pharmaceutical Preparations - supply & distribution</subject><subject>Pharmacoeconomics and Health Outcomes</subject><subject>Pharmacology. 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This paper shows how price constraints affect the profitability, stock returns and R&D spending of EU and US firms. Compared with EU firms, US firms are more profitable, earn higher stock returns and spend more on R&D.
We tested the relationship between price regulation and R&D spending, and estimated the costs of tight EU price regulation. Although results show that EU consumers enjoyed much lower pharmaceutical price inflation, we estimated that price controls cost EU firms 46 fewer new medicines and 1680 fewer research jobs during our 19-year sample period.
Had theUS used controls similar to those used in the EU,we estimate itwould have led to 117 fewer new medicines and 4368 fewer research jobs in the US.</abstract><cop>Cham</cop><pub>Springer International Publishing</pub><pmid>20617857</pmid><doi>10.2165/11535580-000000000-00000</doi><tpages>14</tpages></addata></record> |
| fulltext | fulltext |
| identifier | ISSN: 1170-7690 |
| ispartof | PharmacoEconomics, 2010-01, Vol.28 (8), p.615-628 |
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| language | eng |
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| source | MEDLINE; RePEc; Springer Nature - Complete Springer Journals |
| subjects | Biological and medical sciences Biomedical Research - economics Consumer Price Index Consumers Cost control Cost Control - legislation & jurisprudence Costs and Cost Analysis - economics Drug Industry - economics Drug-cost Economic aspects Economic theory Economics, Pharmaceutical Election results European Union - economics Evaluation Fees, Pharmaceutical - legislation & jurisprudence Government Regulation Health Administration Health Economics Health technology assessment Inflation Inflation (Finance) Leading Article Medicaid Medical sciences Medicine Medicine & Public Health Miscellaneous Pharmaceutical industry Pharmaceutical Preparations - economics Pharmaceutical Preparations - supply & distribution Pharmacoeconomics and Health Outcomes Pharmacology. Drug treatments Presidential elections Price control Price regulations Prices and rates Pricing Public Health Public health. Hygiene Public health. Hygiene-occupational medicine Quality of Life Research Regulation Research & development expenditures Research-and-development. Studies United States Wage & price controls |
| title | Financial Effects of Pharmaceutical Price Regulation on R&D Spending by EU versus US Firms |
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