Medication costs harm patients with multiple sclerosis

Governmental policies aimed to reduce costs to patients of multiple sclerosis (MS) disease modifying therapy (DMT). Closing the Part D coverage gap intended just that—to reduce patient cost burden. Hartung et al.1 found this policy ineffective. Simultaneous pharmaceutical price increases offset reductions in patients' personal costs.

Lowering the bucks for the bang: viewing pharmaceutical price negotiations through a behavioural lens

This article is a speculative perspective on the behavioural factors that may influence price negotiations between pharmaceutical ‘buyers’ and ‘sellers’. It is contended that several behavioural economic-related phenomena may affect price negotiations, including anchoring, loss aversion, a tendency (or otherwise) to reciprocate and a concern for one's reputation. The most important influence, however, is likely to be anchoring, which will particularly benefit the seller of a product if they are allowed to set the initial anchor in a price negotiation. Consequently, it is argued that the most effective way in which to counter the seller's anchor is likely to be to regulate so that the buyer makes the first offer.

Identifying Industry Margins with Price Constraints: Structural Estimation on Pharmaceuticals

We develop a structural model to investigate the effects of pharmaceutical price regulation on demand and on manufacturers’ price-setting behavior in France. We estimate price-cost margins in a regulated market with price constraints and infer whether these constraints are binding, exploiting cost restrictions across drugs, which come from observing the same drugs in potentially price-constrained markets (France) and in markets where prices are unregulated (United States and Germany). Our counterfactual simulations suggest that price constraints generated modest savings for anti-ulcer drugs in 2003–2013 (2 percent of total expenses), relative to a free pricing scenario, and shifted consumption from generic to branded drugs. (JEL C51, D24, I18, L13, L51, L65)