Pharmaceutical prices and political activity
By: Sara F. Ellison [and] Catherine Wolfram
Contributors: Wolfram, Catherine D.; Massachusetts Institute of Technology. Dept. of Economics
Series: Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 01-30; Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 01-30.
Publisher: Massachusetts Institute of Technology, Dept. of Economics
Published: 2001
Place of publication: Cambridge, MA
Language: eng
Number of pages: 44
Description: Drug prices have been a conspicuous political issue in much of recent history, but no more so than during health care reform debates in 1993 and 1994. This paper investigates possible effects of political activity on pharmaceutical prices, with a particular focus on the health care reform period. It evaluates the extent to which pharmaceutical companies slowed the rates at which they increased prices in an attempt to preempt government intervention. To do so, we characterize companies based on their vulnerability to future price regulation. We then consider patterns in price movements across companies. The results suggest that companies whose drugs had longer patent lives and who had recently increased contributions to their corporate political Action Committees (PACs) slowed price increases during 1992 and 1994 more than their competitors. It is difficult to distinguish pricing differences across companies in 1993, perhaps because most companies had pledged to keep price increases below the rate of inflation. Keywords: Pharmaceuticals, Healthcare Reform, Pol.
Notes: Title from cover.

"August 2001."

Includes bibliographical references (p. 26-28).

Abstract in HTML and working paper for download in PDF available via World Wide Web at the Social Science Research Network.

Supported in part by Eli Lilly through their grant to the NBER, the Hoover Institution, the MIT Dean's Fund and a grant from the National Science Foundation. SBR-9810402.