Medicine Prices & Innovations
An International Survey

By W. Duncan Reekie
July 1996
Institute of Economic Affairs
ISBN: 0-255-36369-9
65 p.
$29.50 Paper Original

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The cheif purpose of this study is to examine whether there are any economic advantages in allowing entry to markets at the manufacturer's risk and at prices of their choosing. To examine the thesis that there are significant advantages, six countries were chosen for study because they do allow a degree of free access and degrees of pricing freedom, (the USA, the UK, Denmark, Holland, Germany, and South Africa), at least to the extent that new product prices are not directly controlled.

In just about every other European market there is direct price control on new products used in the national health care system, which makes it impossible to examine the effect of innovative competition. Yet it is this innovative competition which Joseph Schumpeter claimed to be the 'competition which counts'. Schumpeterian competition is seldom more evident than it is in the pharmeceutical industry. Innovative rivalry is a characteristic feature of the sector.

Economics
Health & Welfare
Series: Choice in Welfare Series

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