International Journal of Pharmaceutical Science Invention (IJPSI) is an international journal intended for professionals and researchers in all fields of Pahrmaceutical Science. IJPSI publishes research articles and reviews within the whole field Pharmacy and Pharmaceutical Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
How is drug spending affected in the year 2017Steve Martin
As per the reports published in American Journal of Health-System Pharmacy (AJHP) in the year 2016, national trends in prescription drug expenditures were projected to increase by 6 to 8% in 2017 across all healthcare settings.
A new study adds further evidence to suggest that opioid prescribing in the U.S. is skewed and concentrated among a few providers. Researchers looked at prescribing patterns in data from an unspecified national private insurer between 2003-2017.
Around 670,000 providers prescribed more than 8 million standard doses of opioid prescriptions — but more than a quarter of these prescriptions were written by only 1% of physicians. And in 2017, these physicians prescribed nearly half of all the dispensed opioids. This small group of doctors also prescribed higher doses than recommended, and for longer durations than guidelines allow.
What’s encouraging, the authors suggest, is that the vast majority of physicians do seem to follow guidelines. Some caveats: The study was based on one company’s data, and didn’t look at medical reasons behind prescriptions.
Prescription Medicines - Costs in Context January 2019PhRMA
Discussions about costs are important. We recognize that many are struggling to access the medicine they need, and have important questions about their medicine costs. And we want to help find the answers.
Prescription Medicines - Costs In Context March 2019PhRMA
Discussions about costs are important. We recognize that many are struggling to access the medicine they need, and have important questions about their medicine costs. And we want to help find the answers.
How Do Opioid Prices and the Evolving Opioid Crisis Relate to the North Ameri...with Wind
The Role of Opioid Prices in the Evolving Opioid Crisis is a publication by order of the Commander in Chief; Our 45th President, Mr. Donald J Trump.
This is an objective purview of the role pharmaceutical marketing and advertising and the one true law that is Supply and Demand have had on the current crisis North America finds itself in.
I aim to be objective - no subjective - or opinionated argument - merely share the presentation as it was originally published by < whitehouse.gov. >
I will state this - however - the opioid crisis - is real - it is not some propaganda cooked up by CDC - DEA - or the Free Masons (wholly misunderstood by today's youth - Illuminati).
It has - in some, shape, form or fashion - affected every single North American at some point over the entirety of this - ridiculous attempt at going to war - against substances.
For my opinions, feel free to connect on
< https://www.linkedin.com/in/oudcollective >
FOLLOW @oudcollective
< https://www.twitter.com/oudcollective >
or help out in pinning beginnings at
< https://www.pinterest.com/THEWINDLLC >
Best,
< linktr.ee/C.Brennan.Poole >
< https://allmylinks.com/chasing-the-wind >
Chasing the Wind, LLC DBA THE WIND LLC is licensed under a creative commons attribution share-alike (CC BY-SA) International 4.0 license. Link to license at < www.creativecommons.org/licenses/by-sa/4.0 >
How is drug spending affected in the year 2017Steve Martin
As per the reports published in American Journal of Health-System Pharmacy (AJHP) in the year 2016, national trends in prescription drug expenditures were projected to increase by 6 to 8% in 2017 across all healthcare settings.
A new study adds further evidence to suggest that opioid prescribing in the U.S. is skewed and concentrated among a few providers. Researchers looked at prescribing patterns in data from an unspecified national private insurer between 2003-2017.
Around 670,000 providers prescribed more than 8 million standard doses of opioid prescriptions — but more than a quarter of these prescriptions were written by only 1% of physicians. And in 2017, these physicians prescribed nearly half of all the dispensed opioids. This small group of doctors also prescribed higher doses than recommended, and for longer durations than guidelines allow.
What’s encouraging, the authors suggest, is that the vast majority of physicians do seem to follow guidelines. Some caveats: The study was based on one company’s data, and didn’t look at medical reasons behind prescriptions.
Prescription Medicines - Costs in Context January 2019PhRMA
Discussions about costs are important. We recognize that many are struggling to access the medicine they need, and have important questions about their medicine costs. And we want to help find the answers.
Prescription Medicines - Costs In Context March 2019PhRMA
Discussions about costs are important. We recognize that many are struggling to access the medicine they need, and have important questions about their medicine costs. And we want to help find the answers.
How Do Opioid Prices and the Evolving Opioid Crisis Relate to the North Ameri...with Wind
The Role of Opioid Prices in the Evolving Opioid Crisis is a publication by order of the Commander in Chief; Our 45th President, Mr. Donald J Trump.
This is an objective purview of the role pharmaceutical marketing and advertising and the one true law that is Supply and Demand have had on the current crisis North America finds itself in.
I aim to be objective - no subjective - or opinionated argument - merely share the presentation as it was originally published by < whitehouse.gov. >
I will state this - however - the opioid crisis - is real - it is not some propaganda cooked up by CDC - DEA - or the Free Masons (wholly misunderstood by today's youth - Illuminati).
It has - in some, shape, form or fashion - affected every single North American at some point over the entirety of this - ridiculous attempt at going to war - against substances.
For my opinions, feel free to connect on
< https://www.linkedin.com/in/oudcollective >
FOLLOW @oudcollective
< https://www.twitter.com/oudcollective >
or help out in pinning beginnings at
< https://www.pinterest.com/THEWINDLLC >
Best,
< linktr.ee/C.Brennan.Poole >
< https://allmylinks.com/chasing-the-wind >
Chasing the Wind, LLC DBA THE WIND LLC is licensed under a creative commons attribution share-alike (CC BY-SA) International 4.0 license. Link to license at < www.creativecommons.org/licenses/by-sa/4.0 >
Medicines outlook through_2016_report
source of info:
http://www.imshealth.com/deployedfiles/ims/Global/Content/Insights/IMS%20Institute%20for%20Healthcare%20Informatics/Global%20Use%20of%20Meds%202011/Medicines_Outlook_Through_2016_Report.pdf
Prescription Medicines Costs in Context - June 2019PhRMA
We are in a new era of medicine where breakthrough science is transforming care with innovative treatment approaches and enabling us to more effectively treat chronic disease, the biggest cost driver.
TRENDS AND PATTERNS OF GEOGRAPHIC VARIATIONS IN OPIOID PRESCRIBINGwith Wind
Opioid Prescribing Practices published by JAMA OPEN ACCESS. Objective Journalism. There is an opioid crisis in North America. There is a systemic issue that must be cut off at the head. Healthcare Dissolution is paramount - not just for the millennial and generation Z future leaders - but our childrens's children - and their grandchildren. Stop with the lies and brainwashed propaganda for the love that of all that is true and holy. PLEASE! I BEG OF YOU!
The Canadian Cancer Survivor Network is pleased to offer a webinar titled “Health Canada calls for new tools to control drug prices: what will it mean for patients?”. This webinar will summarize the various pharmaceutical pricing reforms recently announced by federal health minister Dr. Jane Philpott and examine their potential effects on patient access to new innovations.
Prescription Medicines - Costs in Context - September 2018PhRMA
Discussions about costs are important. We recognize that many are struggling to access the medicine they need, and have important questions about their medicine costs. And we want to help find the answers.
Prescription Medicines - Costs in Context - September 2018PhRMA
Discussions about costs are important. We recognize that many are struggling to access the medicine they need, and have important questions about their medicine costs. And we want to help find the answers.
Listeners participated in a live panel session addressing OHIP+, the recently announced expansion of the Ontario drug program to cover young people who are younger than 25 years-old.
This webinar will introduce you to the Patented Medicine Prices Review Board (PMPRB), how they regulate drug pricing in Canada and the proposed changes that will affect cancer patients.
Read Logica’s paper on the need for convergence of healthcare and pharmaCGI
As the biggest industry sector in most European economies, healthcare is already given a big chunk of the gross domestic product (GDP). This portion is expected to become even bigger and have a huge impact on employment, the opportunities to grow businesses and economies in general.
Medicines outlook through_2016_report
source of info:
http://www.imshealth.com/deployedfiles/ims/Global/Content/Insights/IMS%20Institute%20for%20Healthcare%20Informatics/Global%20Use%20of%20Meds%202011/Medicines_Outlook_Through_2016_Report.pdf
Prescription Medicines Costs in Context - June 2019PhRMA
We are in a new era of medicine where breakthrough science is transforming care with innovative treatment approaches and enabling us to more effectively treat chronic disease, the biggest cost driver.
TRENDS AND PATTERNS OF GEOGRAPHIC VARIATIONS IN OPIOID PRESCRIBINGwith Wind
Opioid Prescribing Practices published by JAMA OPEN ACCESS. Objective Journalism. There is an opioid crisis in North America. There is a systemic issue that must be cut off at the head. Healthcare Dissolution is paramount - not just for the millennial and generation Z future leaders - but our childrens's children - and their grandchildren. Stop with the lies and brainwashed propaganda for the love that of all that is true and holy. PLEASE! I BEG OF YOU!
The Canadian Cancer Survivor Network is pleased to offer a webinar titled “Health Canada calls for new tools to control drug prices: what will it mean for patients?”. This webinar will summarize the various pharmaceutical pricing reforms recently announced by federal health minister Dr. Jane Philpott and examine their potential effects on patient access to new innovations.
Prescription Medicines - Costs in Context - September 2018PhRMA
Discussions about costs are important. We recognize that many are struggling to access the medicine they need, and have important questions about their medicine costs. And we want to help find the answers.
Prescription Medicines - Costs in Context - September 2018PhRMA
Discussions about costs are important. We recognize that many are struggling to access the medicine they need, and have important questions about their medicine costs. And we want to help find the answers.
Listeners participated in a live panel session addressing OHIP+, the recently announced expansion of the Ontario drug program to cover young people who are younger than 25 years-old.
This webinar will introduce you to the Patented Medicine Prices Review Board (PMPRB), how they regulate drug pricing in Canada and the proposed changes that will affect cancer patients.
Read Logica’s paper on the need for convergence of healthcare and pharmaCGI
As the biggest industry sector in most European economies, healthcare is already given a big chunk of the gross domestic product (GDP). This portion is expected to become even bigger and have a huge impact on employment, the opportunities to grow businesses and economies in general.
Presentation by Chris Adams, an analyst in CBO’s Health Analysis Division, to the Health Economics Seminar Cosponsored by Boston University, Harvard University, and the Massachusetts Institute of Technology.
Consumer health: time for a regulatory re-think? is a report by RB in association with PAGB, written by the Economist Intelligence Unit. It looks at the changing healthcare environment and the role self-care plays and efforts at regulatory harmonisation, the barriers they have encountered, and prospects for the future.
Government cost containment methods in Asia-Pacific markets are as diverse as the cultures represented in the region, so what lessons are the markets leveraging from cost containment experiences? And what, in the end, are pharmaceutical companies supposed to do about it?
https://doi.org/10.1080/09581596.2018.1444267
COMMENTARY
The opportunity cost of pharmaceutical price increases:
improving health by investing in education
Jonathan E. Fieldinga, Frederick J. Zimmermana and Kristin Calsadab
aCenter for Health advancement, Department of Health Policy & Management, Fielding School of Public Health,
uCla, los angeles, Ca, uSa; bDepartment of Health Policy & Management, Fielding School of Public Health, uCla,
los angeles, Ca, uSa
ABSTRACT
A federal law prohibits the US Government from negotiating pharmaceutical
prices. This law comes with an opportunity cost: resources spent on
unnecessarily highly priced drugs cannot be spent on other social goals. To
calculate the opportunity cost of this spending, this analysis first identified
a proxy for unnecessarily high pharmaceutical spending. We then estimated
the value of the outcomes which this money would produce if invested in an
alternative, high-value use. We estimated the excess price increases in a set
of 80 commonly prescribed drugs paid for by the Centers for Medicare and
Medicaid Services from 2010 to 2014. The value of price increases among
these drugs above the rate of medical inflation was $11.5 billion dollars. This
money has alternative uses, including some that promote health and other
social goals. This is the opportunity cost of unnecessarily high pharmaceutical
spending. Investment in high-school dropout prevention programs was
chosen as a measure of alternative uses for this spending because of the
importance of education as a social determinant of health and because
medical spending has been shown to specifically crowd out education
spending. Invested in programs to increase high-school graduation rates,
this money could create an additional 200,000 high-school graduates, which
in turn would generate an estimated $32 billion in returns (net present value)
to government and health improvements of up to 1 million quality-adjusted
life years (QALYs) per year of redirected expenditures.
Introduction
In 2014, medical care-related expenditures in the United States accounted for 17.8% of gross domestic
product (GDP), totaling over $3 trillion (Centers for Medicare & Medicaid Services, 2015b). Yet despite
outspending all other countries on a per capita basis, the United States ranks in the bottom third of
non-poor countries in life expectancy at birth and 27th out of 34 in life expectancy at age 60, ahead
only of far less wealthy countries like Mexico, Turkey, and Hungary (Scobie, 2015).
A report from the Institute of Medicine (Young & Olsen, 2010) documented $425 billion in excessive
costs-per-service delivered in 2009, including $130 billion in inefficiently delivered services, $190 billion
in excessive administrative costs, and $105 billion in prices that are too high. Although the report breaks
out inefficiency and administrative costs from prices, it should be remembered that all of these factors
increase the ave ...
These lecture slides, by Dr Sidra Arshad, offer a quick overview of physiological basis of a normal electrocardiogram.
Learning objectives:
1. Define an electrocardiogram (ECG) and electrocardiography
2. Describe how dipoles generated by the heart produce the waveforms of the ECG
3. Describe the components of a normal electrocardiogram of a typical bipolar leads (limb II)
4. Differentiate between intervals and segments
5. Enlist some common indications for obtaining an ECG
Study Resources:
1. Chapter 11, Guyton and Hall Textbook of Medical Physiology, 14th edition
2. Chapter 9, Human Physiology - From Cells to Systems, Lauralee Sherwood, 9th edition
3. Chapter 29, Ganong’s Review of Medical Physiology, 26th edition
4. Electrocardiogram, StatPearls - https://www.ncbi.nlm.nih.gov/books/NBK549803/
5. ECG in Medical Practice by ABM Abdullah, 4th edition
6. ECG Basics, http://www.nataliescasebook.com/tag/e-c-g-basics
Ozempic: Preoperative Management of Patients on GLP-1 Receptor Agonists Saeid Safari
Preoperative Management of Patients on GLP-1 Receptor Agonists like Ozempic and Semiglutide
ASA GUIDELINE
NYSORA Guideline
2 Case Reports of Gastric Ultrasound
micro teaching on communication m.sc nursing.pdfAnurag Sharma
Microteaching is a unique model of practice teaching. It is a viable instrument for the. desired change in the teaching behavior or the behavior potential which, in specified types of real. classroom situations, tends to facilitate the achievement of specified types of objectives.
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Acute scrotum is a general term referring to an emergency condition affecting the contents or the wall of the scrotum.
There are a number of conditions that present acutely, predominantly with pain and/or swelling
A careful and detailed history and examination, and in some cases, investigations allow differentiation between these diagnoses. A prompt diagnosis is essential as the patient may require urgent surgical intervention
Testicular torsion refers to twisting of the spermatic cord, causing ischaemia of the testicle.
Testicular torsion results from inadequate fixation of the testis to the tunica vaginalis producing ischemia from reduced arterial inflow and venous outflow obstruction.
The prevalence of testicular torsion in adult patients hospitalized with acute scrotal pain is approximately 25 to 50 percent
ARTIFICIAL INTELLIGENCE IN HEALTHCARE.pdfAnujkumaranit
Artificial intelligence (AI) refers to the simulation of human intelligence processes by machines, especially computer systems. It encompasses tasks such as learning, reasoning, problem-solving, perception, and language understanding. AI technologies are revolutionizing various fields, from healthcare to finance, by enabling machines to perform tasks that typically require human intelligence.
Knee anatomy and clinical tests 2024.pdfvimalpl1234
This includes all relevant anatomy and clinical tests compiled from standard textbooks, Campbell,netter etc..It is comprehensive and best suited for orthopaedicians and orthopaedic residents.
Ethanol (CH3CH2OH), or beverage alcohol, is a two-carbon alcohol
that is rapidly distributed in the body and brain. Ethanol alters many
neurochemical systems and has rewarding and addictive properties. It
is the oldest recreational drug and likely contributes to more morbidity,
mortality, and public health costs than all illicit drugs combined. The
5th edition of the Diagnostic and Statistical Manual of Mental Disorders
(DSM-5) integrates alcohol abuse and alcohol dependence into a single
disorder called alcohol use disorder (AUD), with mild, moderate,
and severe subclassifications (American Psychiatric Association, 2013).
In the DSM-5, all types of substance abuse and dependence have been
combined into a single substance use disorder (SUD) on a continuum
from mild to severe. A diagnosis of AUD requires that at least two of
the 11 DSM-5 behaviors be present within a 12-month period (mild
AUD: 2–3 criteria; moderate AUD: 4–5 criteria; severe AUD: 6–11 criteria).
The four main behavioral effects of AUD are impaired control over
drinking, negative social consequences, risky use, and altered physiological
effects (tolerance, withdrawal). This chapter presents an overview
of the prevalence and harmful consequences of AUD in the U.S.,
the systemic nature of the disease, neurocircuitry and stages of AUD,
comorbidities, fetal alcohol spectrum disorders, genetic risk factors, and
pharmacotherapies for AUD.
These simplified slides by Dr. Sidra Arshad present an overview of the non-respiratory functions of the respiratory tract.
Learning objectives:
1. Enlist the non-respiratory functions of the respiratory tract
2. Briefly explain how these functions are carried out
3. Discuss the significance of dead space
4. Differentiate between minute ventilation and alveolar ventilation
5. Describe the cough and sneeze reflexes
Study Resources:
1. Chapter 39, Guyton and Hall Textbook of Medical Physiology, 14th edition
2. Chapter 34, Ganong’s Review of Medical Physiology, 26th edition
3. Chapter 17, Human Physiology by Lauralee Sherwood, 9th edition
4. Non-respiratory functions of the lungs https://academic.oup.com/bjaed/article/13/3/98/278874
Explore natural remedies for syphilis treatment in Singapore. Discover alternative therapies, herbal remedies, and lifestyle changes that may complement conventional treatments. Learn about holistic approaches to managing syphilis symptoms and supporting overall health.
Prix Galien International 2024 Forum ProgramLevi Shapiro
June 20, 2024, Prix Galien International and Jerusalem Ethics Forum in ROME. Detailed agenda including panels:
- ADVANCES IN CARDIOLOGY: A NEW PARADIGM IS COMING
- WOMEN’S HEALTH: FERTILITY PRESERVATION
- WHAT’S NEW IN THE TREATMENT OF INFECTIOUS,
ONCOLOGICAL AND INFLAMMATORY SKIN DISEASES?
- ARTIFICIAL INTELLIGENCE AND ETHICS
- GENE THERAPY
- BEYOND BORDERS: GLOBAL INITIATIVES FOR DEMOCRATIZING LIFE SCIENCE TECHNOLOGIES AND PROMOTING ACCESS TO HEALTHCARE
- ETHICAL CHALLENGES IN LIFE SCIENCES
- Prix Galien International Awards Ceremony
Pulmonary Thromboembolism - etilogy, types, medical- Surgical and nursing man...VarunMahajani
Disruption of blood supply to lung alveoli due to blockage of one or more pulmonary blood vessels is called as Pulmonary thromboembolism. In this presentation we will discuss its causes, types and its management in depth.
Pharynx and Clinical Correlations BY Dr.Rabia Inam Gandapore.pptx
A0330108
1. International Journal of Pharmaceutical Science Invention
ISSN (Online): 2319 – 6718, ISSN (Print): 2319 – 670X
www.ijpsi.org Volume 3 Issue 3‖ March 2014 ‖ PP.01-08
www.ijpsi.org 1 | P a g e
An Ounce of Prevention or a Pound of Cure? Short- and Long-
Run Effects of Pharmaceutical Patents on U.S. Health Care
Expenditures
Hilary S. Johnson1
and Daniel K.N. Johnson2*
1
School of Public Health, University of Minnesota, United States
2
Department of Economics and Business, Colorado College, United States
ABSTRACT: This study examines the relationship between pharmaceutical R&D and health care
expenditures, distinguishing between the short- and long-run impacts. To measure these relationships
quantitatively, we focus on patents as a key factor driving the costs of pharmaceuticals, and develop a
structured vector autoregressive (SVAR) model to measure the social rate of return to pharmaceutical research
as protected by patents. We conclude with unambiguous results that pharmaceutical patents are not correlated
with higher short-run prices in any measure of medical costs. They are associated with higher long-run prices
in pharmaceuticals themselves, but with lower long-run prices in the aggregate medical sector which includes
pharmaceuticals as a component part. Further, the TRIPS Agreement and Hatch-Waxman Act to enable
generic competition have both been demonstrably effective at lowering prices across the spectrum of medical
sector prices. We conclude that pharmaceutical patents may be economically medicinal themselves, acting as
the ‘ounce of prevention’ that saves a ‘pound of cure’, the cure which would come in the form of even higher
costs elsewhere in the medical sector.
KEYWORD: patent, pharmaceutical, health, TRIPS, Hatch-Waxman
I. INTRODUCTION
Since 1992 the pharmaceutical industry has witnessed radical changes in its economic climate, as a
direct result of major increases in U.S. health care expenditures. In 2007, the United States spent more per capita
on health care than any other nation in the world [1]. Total national health expenditures rose 6.9% that year
alone, twice the rate of inflation, to average $7,600 per person [2]. Rising expenditures have clearly put a huge
drain on the public budget while creating opportunity for the pharmaceutical industry: pharmaceutical sales in
the U.S. are projected to reach half a trillion dollars by 2012 [3]. In fact, prescription drugs are projected to be
the fastest-growing health sector through 2013 [4].
Behind much of these expenditures is research. In 2007 the industry spent $58.8 billion on research
and development (R&D), adding to the array of more than 2,700 medicines in development for nearly 4,600
different indications [5]. For example, new oncology drugs are finally fulfilling the promise of improved
outcomes for millions of patients. The market for cancer-related pharmaceutical products has doubled in the last
five years, and there are now more cancer treatments in late-stage development than in any other therapeutic
area [6].
Potentially, pharmaceutical research could have a positive or a negative effect on health care spending
[7]. Like any investment expenditure, research costs are undoubtedly passed along to consumers, but better
treatment protocols could lower health care costs in the long-run. So it seems wise to ask the question of how
long the payback period is on pharmaceutical research/investment. What is the social rate of return? Does the
U.S. health care system distort incentives to research away from lowering health costs and toward other
objectives instead?
The relationship between pharmaceutical R&D and health care expenditures has obviously been
investigated before. This study aims to draw attention to an important yet hidden aspect of that interaction. As
we will point out, the effects of pharmaceutical innovation on health care spending vary dramatically from the
short- to long-run. To measure these relationships quantitatively, we will focus on the impact of patents as a key
factor driving the costs of pharmaceuticals, as they confer exclusive rights to production and therefore enable
short-term monopoly pricing. In order to compare these short-run and long-run impacts, we develop a
structured vector autoregressive (SVAR) model to measure the social rate of return to pharmaceutical research
as protected by patents.
2. An Ounce of Prevention or a Pound of Cure? Short- and Lon…
www.ijpsi.org 2 | P a g e
We conclude with unambiguous results that pharmaceutical patents are not correlated with higher
short-run prices in any measure of medical costs. They are associated with higher long-run prices in
pharmaceuticals themselves, but with lower long-run prices in the aggregate medical sector which includes
pharmaceuticals as a component part. Presumably, higher pharmaceutical costs are lowering hospitalization
costs more than proportionately. Further, the TRIPS Agreement and Hatch-Waxman Act to enable generic
competition have both been demonstrably effective at lowering prices across the spectrum of medical sector
prices. We conclude that pharmaceutical patents may be economically medicinal themselves, acting as the
„ounce of prevention‟ that saves a „pound of cure‟, the cure which would come in the form of even higher costs
elsewhere in the medical sector.
The following section will review the literature on this topic, while Section III will describe our
dataset. Section IV‟s presentation of the model foreshadows the results in Section V. The final section
concludes with implications for policy-makers and future academic study.
II. LITERATURE
Health care spending is commonly believed to be influenced by three factors primarily: rising prices,
improving technology, and an aging population [8]. According to CBO analysis however, over the last fifty
years the aging of the population had a relatively small impact on overall health spending growth. A general
consensus among top analysts [9, 10, 11, 12] suggests that a significant share of annual real health care cost
growth can be attributed to medical technology, predicated on an analysis of the “residual”: the unexplained
variance in cost growth. In essence, since an aging population, health insurance, physician-induced demand,
defensive medicine, administrative costs, and the costs of caring for the terminally ill in the last year of life do
not account for large increases in spending growth, the cause must be the residual or the “march of science and
the increased capabilities of medicine” [13].
The march of science is fueled by incentives to innovate, often created through the protection of
intellectual property (IP), where IP is defined as an intangible asset such as skill, knowledge or information. In
the pharmaceutical industry, patent incentivize firms by granting exclusive rights for twenty years to the holder
of a novel, non-obvious, useful invention. Exclusivity applies to production, use or sale (including imports),
effectively compensating the innovator for the risky investment in R&D with limited-term monopoly profits via
prices higher than perfect competition would engender. The rationale is that it allows firms to collect profits
sufficient to, a) cover high fixed costs of development and FDA regulation, b) induce more R&D within the
firm, c) account for profits lost from new innovation being legally integrated into the public domain, and d)
compensate for the risks of research.
Monopolistic pricing necessarily leads to higher health expenditures, because the demand for
pharmaceutical products is clearly inelastic [14]. Since price increases will categorically lead to higher
spending in the health care industry, these two terms will be used interchangeably within this study.
Expenditures on pharmaceuticals will therefore clearly depend on the duration of market exclusivity
afforded by IP law. For patents filed prior to June 8, 1995, the US term for a patent was either 20 years from the
earliest claimed filing date or 17 years from the issue date, whichever is longer [15]. Patents filed on a date later
than June 8th
comply with the worldwide patent length standard of twenty years from the filing date (a standard
within the World Trade Organization, known as Trade Related Aspects of Intellectual Property Rights, or
TRIPS).
Extensions to patent duration are made in three special cases [16]. In the cases of drugs to treat rare
diseases and conditions affecting fewer than 200,000 patients, the Orphan Drug Act of 1983 grants up to seven
extra years, and in the cases of pediatric drugs, the Food and Drug Administration Modernization Act of 1997,
grants up to six extra months.
The most notable extensions are made under the Hatch-Waxman Act [17]. Officially entitled the Drug
Price Competition and Patent Term Restoration Act of 1984, the Hatch-Waxman Act increases the life span of a
patent by up to five extra years to restore patent life lost during the pre-market regulatory process. A second
major provision of the law facilitates the entry of generic competitors after patent expiration [18]. Under the
new Act, a generic drug company need only submit an Abbreviated New Drug Application (ANDA), requiring a
demonstration of bioequivalence to the pioneer product. Grabowski and Vernon examine the net effect of R&D
incentives that simultaneously promote generic competition and extend patent life, finding that the net effect is
indeed positive for three cases.
3. An Ounce of Prevention or a Pound of Cure? Short- and Lon…
www.ijpsi.org 3 | P a g e
Despite the assertion that technological change has accounted for the bulk of health care cost increases,
there is no doubt that such innovation has made invaluable improvements to quality of life [19]. Vast literature
on this side of the spectrum examines the benefits of patent-induced innovation in the long run. For example,
Manton and Gu find a seven year increase in life expectancy between 1950 and 1990 [20].
Kim et al. [21] conclude that one reason for U.S. health spending is quite simply the public‟s
commitment to innovation and willingness to pay. Murphy and Topel [22] develop methods for valuing health
improvements based on individuals‟ willingness to pay. Their results indicate that past health improvements
have been enormously valuable, with gains in life expectancy over the twentieth century worth more than $1.2
million per person, and rising longevity contributing about $3.2 trillion per year to the national wealth between
1970 and 2000. Compared to the $60 billion spent per year in applied health research, they suggest that
progress is too slow and spending too low.
Lichtenberg [23] concludes similarly. His most conservative estimates indicate that the use of post-
1990 drugs in 2002 reduced the number of pre-retirement life years lost by roughly one and a half million.
Based on prescription drug expenditures and the reduced costs of hospitals and nursing homes, he concludes that
the net cost per life-year saved before age 75 was a reasonable $15,974.
We propose to add to this literature‟s discussion in the following way, adopting an argument from
Charles and Williams [24]. Suppose that tomorrow we reduced the production of new innovation, leaving the
current stock of ideas unchanged. We define the social rate of return to pharmaceutical innovation as the gain in
expenditures associated with this change. We believe that an SVAR model will serve this new question well,
and we will outline our own application of this technique after presenting a summary of our data.
III. DATA
Our goal in this paper is to model the time path of prices, accounting for natural short- and long-term
relationships while identifying factors that may have caused one-time changes in price level or inflation rates.
We use monthly data for 381observation periods from 1978 through 2007, all adjusted to a base period of 1982-
84.
We choose to measure prices in three separate manners. First, Medical Care Prices (mCPI) are
measured by the consumer price index of medical care goods and services, designed by the Bureau of Labor
Statistics to reflect inflation at the retail level based on a constant-quality market basket of medical goods and
services [25]. The index includes four main divisions: medical care commodities, including prescription drugs;
medical care services, including physician and dental; hospital and related services; and health insurance.
Second, we consider hospital and related services (hCPI) separately, to determine whether there is a trade-off
between pharmaceutical and hospital prices, since Lichtenberg [26] and others show that trade-off clearly in
expenditures. Third, we consider prescription drugs explicitly (pCPI), to test whether IP affects pharmaceuticals
more clearly than other medical costs/prices. The pCPI and hCPI will also be used as explanatory variables as
well, since they are component parts of the mCPI.
Innovation is measured by the number of issued patents. There is a long tradition of using patents as
imperfect indicators of innovation [27, 28, 29] because they represent an externally validated measure of
technological novelty, and they confer property rights on the assignee so have economic significance [30].
While in some sectors, patents may be less used compared to trade secrets, patents are widely and consistently
used in chemicals relative to most other economic sectors [31, 32]. We specifically consider the number of
patents issued monthly between 1978 and 2007 to U.S. patent classes 514 and 424, both titled „Drugs, Bio-
Affecting and Body Treating Compositions‟. All data are drawn from the U.S. Patent and Trademark Office.
In the short-run, we expect increases in innovation to increase prices on prescription drugs, and by
extension, prices on all medical goods. In the long-run we can expect the opposite: reduced prices for
prescription drugs and medical goods because of the expiration of patents and increased competition with
generic drugs [33], along with the possibility of advances in medicine that replace less cost-effective drug
treatments.
We expect a negative correlation between hCPI and patents in both the short- and long-runs because
prescription drugs may be substitute goods for hospital services.
The Food and Drug Administration (FDA) records generic drug approvals by date [34], and we use
counts of those by month as a control variable. For all price variables in the short- and long-runs, we expect that
more generic drugs will be associated with lower prices.
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We also include two policy variables in our analysis, to reflect the signing of the TRIPS and Hatch-
Waxman legislation respectively. Both are constructed as dummy variables taking the value of unity for the
period under which the policy is in force. For all price indices, we expect TRIPS to have an inflationary effect
in the short-run (due to an effective three-year extension of monopoly rights) and a deflationary effect in the
long-run (due to an increase in the incentives to innovate for even more spectacular increases to life expectancy
or cost-effectiveness of treatment plans). We expect similar impacts from Hatch-Waxman, as it was designed to
increase R&D (higher costs to pass through in the short-run) but increase generic competition and improve cost-
efficiency (lower costs in the long-run).
A summary table of the variables is presented in Table I, along with the expected signs of estimated
coefficients. Notice that the range and variation for the three price indices is fairly similar, with a little wider
dispersion in the health cost index. The number of patents varies quite widely from a low to 99 patents to a peak
of 1532 in any given period. Generics similarly range widely, from zero to 63 patents in a given period. Recall
that the TRIPS and Hatch-Waxman variables are dummies, so their presentation is slightly different in the table
below.
IV. A STRUCTURED VECTOR AUTOREGRESSIVE MODEL
The VAR was initially formulated by Sims [35] who suggested the need for an econometric model to
capture the evolution and interdependencies between multiple time series. It was developed as a theory-free
method to estimate economic relationships, as an alternative to the identification restrictions in structural
models. However, successive generations of economists have imposed small structural constraints on VAR
systems, for example to indicate known uni-directional causality. We use that established technique here.
TABLE I: Summary of variables
Variable Mean St. Dev. Max Min Expected Impact on costs in
Short-run Long-run
Mcpi 200.85 90.89 357.66 58.90 + +
hCPI 244.37 138.13 515.68 51.80 + +
pCPI 216.21 99.93 374.39 58.90 + +
Patents (pats) 467.36 247.58 1532 99 +* -
Generics (gens) 15.04 12.04 63 0 - -
Mean Number of
zeroes
Max Min
TRIPS 0.45 211 1 0 + -
Hatch-Waxman (HW) 0.81 73 1 0 + -
* expected sign is negative for hCPI but positive for mCPI and pCPI.
As dependent variables we are using medical care prices instead of costs, making the assumption that
there is a close linkage between the two. Specifically, we use the Consumer Price Index (CPI), which only
approximates what households spend out-of-pocket on goods and services. We are considering out-of-pocket
expenditures to be the measure of interest, although policymakers may easily make the valid point that in fact
total expenditures are more important from a policy perspective.
Another critical assumption in many studies is the question of functional form, and propose an ECM
(VAR) process [36, 37] to inform the analysis from the linearized first-order effects regardless of the underlying
true functional form. Each section includes a long-run equilibrium equation (1.1, 2.1, and 3.1) and a short-
run dynamic (lagged) equation (1.2, 2.2, and 3.2):
(1.1) pCPIt = βp,1 + βp,2patst + βp,3TRIPSt + βp,4HWt + βp,5genst + βp,6timet + up,t
(1.2) ΔpCPIt = δp,1 +
n
s
sp
0
,2,
Δpatst-s +
n
s
sp
0
,3,
ΔTRIPSt-s +
n
s
sp
0
,4,
ΔHWt-s
+
n
s
sp
0
,5,
Δgenst-s + δp,6timet +
n
s
sp
0
,7,
ΔpCPIt-s + εp,t
(2.1) hCPIt = βh,1 + βh,2patst + βh,3TRIPSt + βh,4HWt + βh,5genst + βh,6timet
+ βh,7pCPIt + uh,t
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(2.2) ΔhCPIt = δh,1 +
n
s
sh
0
,2,
Δpatst-s +
n
s
sh
0
,3,
ΔTRIPSt-s +
n
s
sh
0
,4,
ΔHWt-s
+
n
s
sh
0
,5,
Δgenst-s + δh,6timet +
n
s
sh
0
,7,
ΔpCPIt-s
+
n
s
sh
0
,8,
ΔhCPIt-s + εh,t
(3.1) mCPIt = βm,1 + βm,2patst + βm,3TRIPSt + βm,4HWt + βm,5genst + βm,6timet
+ βm,7pCPIt + βm,8hCPIt + um,t
(3.2) ΔmCPIt = δm,1 +
n
s
sm
0
,2,
Δpatst-s +
n
s
sm
0
,3,
ΔTRIPSt-s +
n
s
sm
0
,4,
ΔHWt-s
+
n
s
sm
0
,5,
Δgenst-s + δm,6timet +
n
s
sm
0
,7,
ΔpCPIt-s
+
n
s
sm
0
,8,
ΔhCPIt-s +
n
s
sm
0
,9,
ΔmCPIt-s + εm,t
Notice that we model long-run costs to depend only upon „smaller‟ concepts of cost (i.e. medical care
prices depend on hospital and pharmaceutical prices, hospital prices depend on pharmaceutical prices but not
overall medical care prices, and pharmaceutical prices do not depend on either larger concept of price). In the
short-run, we permit some impact of lagged own-price values (e.g. past pharma prices may have an impact on
today‟s pharma prices), but otherwise retain the same small-to-big accumulation structure of costs.
We include all exogenous variables in each equation, permitting patents, the TRIPS Agreement, the
Hatch-Waxman Act, the number of generic drugs and a time trend to potentially impact each level of costs.
V. ESTIMATION RESULTS
The appropriate lag length in each regression was determined via the Akaike Information Criterion
(AIC). Both pCPI and hCPI models settled on a 13 month lag, with a slightly longer 16-month lag for the mCPI
model. There are a number of surprises in the results below, alongside some comforting regularities.
Of greatest interest for this paper is the role that patents play in health costs at each level of
aggregation. In the short run, there is no evidence that patents play any statistically significant role in price
changes at any level of aggregation. In the long run, patents are (unsurprisingly) associated with higher prices
for pharmaceuticals. The results conclude that an additional thousand pharmaceutical patents would raise long-
run pharma prices by 2.79 points, or roughly 1.31 percent at the sample average. Considering that a typical
month sees 467 pharma patents granted, patents overall correspond to a 0.60 percent average effect on
pharmaceutical prices.
There is an insignificant direct impact of patents on hospital costs, but the indirect effect (via pharma
prices in the VAR) is negative, restraining hospitalization costs as new pharmaceutical products reduce the
severity and duration of hospital stays. Combined, an average monthly number of pharma patents would result
in a net 0.41 percent increase in hospital costs.
The long-run effect of patents on overall medical costs is negative in a direct sense, but that is offset by
the positive indirect impacts via pharma costs. Our empirical results suggest that the long run net effect of
pharma patents would be a slightly deflationary -0.49 percent in an average month.
This combination of results is interesting for several reasons. First, there appears to be no evidence for
the claim that patents raise pharmaceutical prices in the short term, but there is strong support for the claim that
they raise prices in the long run instead. This pairing of results is consistent with competition between
oligopolists, where short-run competition leads to prices that do not cover the long-run costs of new product
development or advertising. However, those costs of market development and advertising must be incorporated
in the long-run, and in fact raise the cost curves for all firms in the industry.
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Table II: Estimation results
Long-run relationships
pCPI hCPI mCPI
Coef. t-stat. Coef. t-stat. Coef. t-stat.
Constant 38.434 (13.13) ***
46.323 (14.49) ***
27.986 (19.70) ***
Patents (000s) 2.792 (1.68) *
2.177 (1.20) -2.109 (2.62) ***
TRIPS -3.082 (2.57) ***
-0.003 (0.01) -1.237 (2.13) **
Hatch-Waxman -4.406 (4.18) ***
-10.184 (8.85) ***
-5.122 (10.02) ***
Generics -0.104 (3.90) ***
-0.113 (3.89) ***
-0.062 (4.83) ***
Time trend 0.654 (14.96) ***
0.555 (11.61) ***
0.318 (14.97) ***
pCPI lagged --- --- -0.167 (161.52) ***
0.110 (187.04) ***
hCPI lagged --- --- --- --- 0.005 (20.64) ***
mCPI lagged --- --- --- --- --- ---
Observations 365 365 365
χ2
statistic 249.16 ***
409.19 ***
877.78 ***
Short-run relationships
ΔpCPI ΔhCPI ΔmCPI
Coef. t-stat. Coef. t-stat. Coef. t-stat.
Constant 0.844 (8.30) ***
0.559 (3.72) ***
0.699 (10.43) ***
ΔPatents (000s) 0.133 (0.45) -0.439 (1.01) -0.051 (0.26)
ΔTRIPS -0.271 (0.38) 0.626 (0.59) 0.299 (0.63)
ΔHatch-Waxman -0.367 (0.51) 0.302 (0.29) 0.189 (0.40)
ΔGenerics -0.015 (3.21) ***
-0.011 (1.64) -0.003 (1.11)
Time trend
-3.54 x
10-4 (0.92)
2.34 x
10-3 (4.12) *** 8.17 x
10-5 (0.32)
ΔpCPI lagged -0.011 (3.24) ***
-0.013 (1.89) *
-0.029 (7.95) ***
ΔhCPI lagged --- --- 0.276 (79.59) ***
-0.211 (59.48) ***
ΔmCPI lagged --- --- --- --- -0.557 (34.80) ***
Observations 364 364 364
χ2
statistic 13.09 55.95 ***
20.76 ***
Significance is indicated by *
at the 10 percent, **
at the 5 percent, and ***
at the 1 percent level.
Second, pharmaceutical patents appear to be desirable for consumers in the long run via overall health
care costs, presumably because new products reduce the cost of medical care in the aggregate. After all,
presumably that is one of the primary reasons to engage in pharmaceutical research (alongside increased quality
of outcomes).
The TRIPS Agreement, Hatch-Waxman Act and the increase of generic varieties have all lived up to
their original intent, namely to reduce health costs at every level in the long run. Presumably all three have done
so by increasing competition among providers of patentable pharmaceutical products. Notice, however, that
none of the three has any impact on any price levels in the short run, aside from the significant negative effect of
more generic competition on pharmaceutical prices in particular. Even this effect is empirically very small, with
an additional generic competitor lowering prices in pharmaceuticals overall by a mere 0.015 price index points
(and potentially a little more via the indirect effect of pharma prices via the VAR).
To be concrete, our results suggest that the TRIPS Agreement is associated with a three point lower
cost index in pharmaceuticals. Hatch-Waxman has been much more effective, associated with a 4.4 point
decline in the pharma CPI and an additional 0.1 point decline for every generic that the Act enabled. The effects
of Hatch-Waxman are more than twice as potent in the hospitalization cost measure of prices, with a more than
10-point decline in costs. Overall medical sector costs naturally show a result between these two, with TRIPS
accounting for a 1.2 point decline in costs and Hatch-Waxman accounting for a 5.1-point decline in costs (plus
the marginal effect of each additional generic).
Our results further suggest that at least some health-related costs are mean-reverting or self-containing
in nature. For example, increases in pharmaceutical prices are associated with a subsequent decrease in
hospitalization costs in the long-run, and are associated with subsequent declines in all variations of health costs
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in the short-run. While long-run overall medical costs rise with rises in the constituent parts, in the short run
overall medical costs reverse the direction of previous changes in pharmaceuticals, hospital and even overall
medical costs.
So why then are health costs rising? Our evidence suggests that there is a powerful time trend
underlying the rise, one that naturally has little impact on short-run prices but has enormous and statistically
significant impact on long-run costs. Pharmaceuticals are seeing the largest period-to-period gain in prices
based on trend (0.65 CPI-points per month), followed by hospitalization costs (0.56 point per month). By the
time the trend hits overall health costs, the impact has been cut in half by the combined impacts of patents and
legislation like Hatch-Waxman, but that half is still large enough to raise overall medical costs by 0.32 point per
month due to direct trend alone. That inertial effect amounts to 4.71 points per year of increase in overall
medical costs once the VAR effects of pharma prices and hospitalization prices are included. Any policy to
curb costs is fighting against that starting point.
VI. CONCLUSION
The United States health care system is defined by high and rising expenditures, uncontrolled costs,
and system inefficiencies. Pharmaceutical patents have been blamed in part as the culprit for this outcome, and
this study has attempted to shed more light on the ways in which prices (or costs) in the medical sector evolve
over time.
We find very little evidence to suggest that patenting rates are in any way correlated with prices.
Instead, we find that most inflation is inertial. Pharmaceutical patents are not at all correlated with short-run
prices, and while they are associated with higher long-run pharma costs they simultaneously are associated with
lower long-run medical costs overall. Policies aimed at encouraging competition, such as the TRIPS Agreement
and Hatch-Waxman Act with ensuing generic competitors, have effectively counteracted any increases due to
pharmaceutical patenting.
There is the strong possibility that our measure of patents is simply inadequate. Perhaps the „value‟ of
a patent, rather than their frequency, is essential for a robust analysis of this sort. An extension to this work will
pursue that avenue of research, targeting the ongoing debate in the innovation literature about how to measure
„value‟ or impact without unintentionally biasing the result. Unfortunately, the available measures of patent
value are problematic at best, relying on surveys of experts, patent renewal records, patent auction prices or
academic citation records. Each carries a list of inconvenient concerns.
As academics concerned about health care issues, and as policymakers designing a revision to US
health care policy in part to control costs, we offer these results. Innovation has long been the engine of US
economic growth, a fact as true in health care as in any other sector. While innovation comes at an obvious
cost, we have shown here that patents given as incentives to innovators in pharmaceuticals are not the driving
force of recent medical inflation. Pharmaceutical research is the proverbial „ounce of prevention‟ which prevent
the need for a „pound of cure‟ in the form of even higher hospitalization and overall medical sector costs.
We therefore encourage our community to think carefully about retaining the financial incentives to
innovate where they stimulate long-run benefits to our society in terms of care or lower costs. Instead, let us
target the inertial roots of medical inflation, whose roots apparently do not reside with patented innovations.
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