Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/56372 
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dc.contributor.authorGrönqvist, Eriken
dc.contributor.authorLundin, Douglasen
dc.date.accessioned2012-03-28T13:11:38Z-
dc.date.available2012-03-28T13:11:38Z-
dc.date.issued2006-
dc.identifier.urihttp://hdl.handle.net/10419/56372-
dc.description.abstractWho gains from more information on the quality of pharmaceutical drugs? Are there incentives for voluntary post-approval clinical trials among pharmaceutical companies? Contrary to popular belief, this paper shows that it is not in the consumer interest that clinical evidence establishing the relative effectiveness within a class of drugs are produced. Pharmaceutical companies, on the other hand, do benefit: the elimination of uncertainty regarding quality increases expected product differentiation, thereby raising prices for both high-quality and low-quality drugs, to the disadvantage of consumers. Still there is no unique equilibrium where the market provides clinical trials. If the costs of carrying out clinical trials are small, in relative terms, there will be a coordination problem between firms, as firms will want a rival firm to carry the cost. If the costs are large they will be prohibitive. Legislation that obligates entering firms to carry out post-approval trials is beneficial for firms if it solves the coordination problem, but is otherwise harmful. Legislation is never in the interest of consumers.en
dc.language.isoengen
dc.publisher|aStockholm School of Economics, The Economic Research Institute (EFI) |cStockholmen
dc.relation.ispartofseries|aSSE/EFI Working Paper Series in Economics and Finance |x636en
dc.subject.jelD81en
dc.subject.jelD83en
dc.subject.jelI18en
dc.subject.jelL15en
dc.subject.ddc330en
dc.subject.keywordQuality uncertaintyen
dc.subject.keywordSymmetric informationen
dc.subject.keywordPharmaceutical marketen
dc.subject.keywordClinical trialsen
dc.subject.stwPharmazeutisches Produkten
dc.subject.stwAnreizregulierungen
dc.subject.stwProduktqualitäten
dc.subject.stwPreisniveauen
dc.subject.stwTheorieen
dc.subject.stwPharmazeutische Forschungen
dc.titleIncentives for clinical trials-
dc.typeWorking Paperen
dc.identifier.ppn518070476en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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