On international cost-sharing of pharmaceutical R&D
Barros, Pedro Pita (Universidade Nova de Lisboa)
Martínez Giralt, Xavier (Universitat Autònoma de Barcelona)

Date:	2008
Abstract:	Ramsey pricing has been proposed in the pharmaceutical industry as a principle to price discriminate among markets while allowing to recover the (fixed) R&D cost. However, such analyses neglect the presence of insurance or the fund raising costs for most of drug reimbursement. By incorporating these new elements, we aim at providing some building blocks towards an economic theory incorporating Ramsey pricing and insurance coverage. We show how coinsurance affects the optimal prices to pay for the R&D investment. We also show that under certain conditions, there is no strategic incentive by governments to set coinsurance rates in order to shift the financial burden of R&D. This will have important implications to the application of Ramsey pricing principles to pharmaceutical products across countries.
Grants:	Agència de Gestió d'Ajuts Universitaris i de Recerca 2005/SGR-00836 Ministerio de Ciencia e Innovación SEJ2006-00538-ECON
Note:	Financial support of POCTI/EGE/58934/2004 (Pedro P. Barros) and the Barcelona Economics Program of CREA and projects 2005SGR-00836, SEJ2006-00538-ECON, and Consolider-Ingenio 2010 (Xavier Martinez-Giralt) is gratefully acknowledged.
Note:	Altres ajuts: POCI/EGE/58934/2004 i HP2003-0066
Rights:	Tots els drets reservats.
Language:	Anglès
Document:	Article ; recerca ; Versió acceptada per publicar
Subject:	Ramsey pricing ; Coinsurance
Published in:	International journal of health care finance and economics, Vol. 8, Num. 4 (Dec 2008) , p. 301-312, ISSN 1389-6563

DOI: 10.1007/s10754-008-9042-2

Postprint 19 p, 585.5 KB

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