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Title:Do cost-sharing and entry deregulation curb pharmaceutical Innovation? PDF Logo
Authors:Grossmann, Volker
Issue Date:2011
Series/Report no.:CESifo working paper: Public Finance 3439
Abstract:This paper examines the role of both cost-sharing schemes in health insurance systems and entry regulation for pharmaceutical R&D expenditure, drug prices, aggregate productivity, and income. The analysis suggests that both an increase in the coinsurance rate and stricter price regulations adversely affect R&D spending in the pharmaceutical sector. In contrast, entry deregulation may lead to quality-improvements of pharmaceuticals, despite reducing price-setting power of pharmaceutical companies. Extension to an endogenous growth context suggests that, when individual labor supply depends on health status, both cost-sharing and entry barriers in the pharmaceutical sector also affect aggregate productivity and wage rates.
Subjects:aggregate productivity
cost-sharing
entry deregulation
health insurance
pharmaceutical innovation
JEL:I10
L10
O30
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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