Cover: The Effect of Regulation on Pharmaceutical Revenues

The Effect of Regulation on Pharmaceutical Revenues

Experience in Nineteen Countries

Published Jan 9, 2009

by Neeraj Sood, Han de Vries, Italo A. Gutierrez, Darius N. Lakdawalla, Dana P. Goldman

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We describe pharmaceutical regulations in nineteen developed countries from 1992 to 2004 and analyze how different regulations affect pharmaceutical revenues. First, there has been a trend toward increased regulation. Second, most regulations reduce pharmaceutical revenues significantly. Third, since 1994, most countries adopting new regulations already had some regulation in place. We find that incremental regulation of this kind had a smaller impact on costs. However, introducing new regulations in a largely unregulated market, such as the United States, could greatly reduce pharmaceutical revenues. Finally, we show that the cost-reducing effects of price controls increase the longer they remain in place.

Reprinted with permission from Health Affairs, Vol. 28, No. 1, January/February 2009. Copyright © 2008 Project HOPE-The People-to-People Health Foundation, Inc.

Originally published in: Health Affairs, Vol. 28, No. 1, January/February 2009, pp. w125-w137.

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