A Markov-perfect equilibrium model of the impacts of price controls on the performance of the pharmaceutical industry

• 成果类型: Article
• 署名作者: Filson, Darren
• 署名单位: Claremont Colleges; Claremont Graduate University; Claremont McKenna College
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/j.1756-2171.2012.00159.x
• 发表日期: 2012
• 页码: 110-138
• 关键词: research-and-development; generic competition; simulation-model; US; INNOVATION; PRODUCTS; DYNAMICS; POLICY; drugs; entry

摘要

I introduce a computable dynamic equilibrium model of the pharmaceutical industry, parameterize it using industry facts, and use it to predict what happens if the United States adopts price controls or one or more non-U.S. countries abandon their controls. The model generates implications for firm value, research and development (R&D), the flow of new drugs, and consumer welfare. I highlight the sensitivity of the results to alternative assumptions about R&D costs, market size, technological opportunities, consumer heterogeneity, the extent to which choices internalize prices, barriers to entry in R&D, the extent to which R&D outcomes are correlated, and the nature of the controls.