Pharmaceutical Price Controls in the Oecd Countries

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Pharmaceutical Price Controls in OECD Countries
Implications for U.S. Consumers, Pricing, Research and Development, and Innovation

U.S. Department of Commerce International Trade Administration

The International Trade Administration (ITA) has as its mission the creation of economic opportunity for U.S. workers and firms by promoting international trade, opening foreign markets, ensuring compliance with trade laws and agreements, and supporting U.S. commercial interests at home and abroad. To learn more about the ITA, write to: International Trade Administration, Office of Public Affairs, U.S. Department of Commerce, Washington, DC 20230, or visit the ITA’s Internet site at www.ita.doc.gov.

Pharmaceutical Price Controls in OECD Countries
Implications for U.S. Consumers, Pricing, Research and Development, and Innovation

U.S. Department of Commerce International Trade Administration Washington, DC December 2004

Printed on recycled paper. Federal Recycling Program

The full text of this report is available on the International Trade Administration’s Internet site at www.ita.doc.gov/drugpricingstudy. It is also available for purchase as a paper, microfiche, or electronic reprint from the National Technical Information Service, 5285 Port Royal Road, Springfield, VA 22161; www.ntis.gov.

ii U.S. Department of Commerce, International Trade Administration

Contents

Executive Summary vii 1 Introduction 1 2 Drug Price Regulations in Selected OECD Countries—An Overview of the Issues 3 3 Price And Revenue Effects 10 4 Impact of Deregulating Prices on Research and Development, Innovation, and Consumers 25 Appendix A: Technical Methodology 35 Appendix B: Drug Pricing Study—Federal Register Notice Responses 49 Appendix C: Report on Pharmaceutical Markets in 11 OECD Countries 57

Pharmaceutical Price Controls in OECD Countries iii

iv U.S. Department of Commerce, International Trade Administration

Abbreviations and Acronyms
ANDA ANDS ATC ATP AUSFTA BCG BPI CMS CMRI CRC CSIRO CTMs DDD DMF EEA EMA EPC FDA GDP HHS IMF IPR KFDA KG LTP MHLW MHRA MHW MIFs NASs NDO NFMI NHI NHS NICE NMEs OECD OTC PBAC PBPA PBS PhRMA PMPRB PPRS PRS R&D SHI SMEs SPC SU TGA TPD Abbreviated New Drug Application Abbreviated New Drug Submission Anatomical Therapeutic Chemical actual transaction price Australia–U.S. Free Trade Agreement Boston Consultancy Group Biotechnology Industry Association Center for Medicare & Medicaid Services Center for Medicines Research International clinical research providers Commonwealth Scientific and Industrial Research Organization Community Trade Marks Defined Daily Dose Drug Master File European Economic Area European Medicines Agency European Patent Convention Food and Drug Administration gross domestic product U.S. Department of Health and Human Services International Monetary Fund intellectual property rights Korean Food and Drug Administration kilogram lowest transaction price Ministry of Health, Labor, and Welfare Medicines and Healthcare Products Regulatory Agency Ministry of Health and Welfare Mutual Insurance Funds New Active Substances National Drug Organization National Federation of Medical Insurance National Health Insurance National Health Service National Institute for Clinical Excellence new molecular entities Organization for Economic Cooperation and Development over-the-counter Pharmaceutical Benefits Advisory Committee Pharmaceutical Benefits Pricing Authority Pharmaceutical Benefits Scheme Pharmaceutical Research and Manufacturers of America Patented Medicines Price Review Board Patented Price Regulation Scheme Pharmaceutical Reimbursement Schedule research and development statutory health insurance small and medium-sized enterprises Supplementary Protection Certificates standard units Therapeutic Goods Administration Therapeutic Products Directorate

Pharmaceutical Price Controls in OECD Countries v

TRIPS VRR WHO WIPO WTO

Agreement on Trade-Related Aspects of...
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