Economics of innovation in the pharmaceutical industry
Date
2020-07-06
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Abstract
This thesis is a collection of three essays which investigate the economics of innovation in the healthcare industry. In Chapter 2 I use a global data set to measure the effect of health losses and average patient income on innovation in different therapeutic areas. I show that the average patient income is a strong predictor of the number of clinical trials, and I demonstrate how this can be used to identify diseases that are underfunded relative to their harm to human health. Chapter 3 presents a theoretical model of health markets with public health insurance. The model describes the operation of the cost-effectiveness threshold frequently employed by public insurers to decide which health products to cover. I show that having two different thresholds for products with and without patents can increase efficiency. Chapter 4 introduces a structural model of pharmaceutical innovation. Estimates from this model show that the net effect of a firm's innovation on their rivals' decision to innovate in the same therapeutic area is negative. The model demonstrates that previous firm-specific experience in a therapeutic area is a key factor in the decision to invest in that therapeutic area.
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Keywords
Health innovation, Empirical industrial organization, Public health insurance, Cost-effectiveness threshold, Market power, Health equity
Citation
Moradpour Taleshi, J. (2020). Economics of innovation in the pharmaceutical industry (Doctoral thesis, University of Calgary, Calgary, Canada). Retrieved from https://prism.ucalgary.ca.