NBER Working Papers by Rena M. Conti

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Working Papers

January 2015Pricing in the Market for Anticancer Drugs
with David H. Howard, Peter B. Bach, Ernst R. Berndt: w20867
Drugs like bevacizumab ($50,000 per treatment episode) and ipilimumab ($120,000 per episode) have fueled the perception that the launch prices of anticancer drugs are increasing over time. Using an original dataset of 58 anticancer drugs approved between 1995 and 2013, we find that launch prices, adjusted for inflation and drugs’ survival benefits, increased by 10%, or about $8,500, per year. Although physicians are not penalized for prescribing costly drugs, they may be reluctant to prescribe drugs with prices that exceed subjective standards of fairness. Manufacturers may set higher launch prices over time as standards evolve. Pricing trends may also reflect manufacturers’ response to expansions in the 340B Drug Pricing Program, which requires manufacturers to provide steep discounts to ...
March 2014Specialty drug prices and utilization after loss of U.S. patent exclusivity, 2001-2007
with Ernst R. Berndt: w20016
We examine the impact of loss of U.S. patent exclusivity (LOE) on the prices and utilization of specialty drugs between 2001 and 2007. We limit our empirical cohort to drugs commonly used to treat cancer and base our analyses on nationally representative data from IMS Health. We begin by describing the average number of manufacturers entering specialty drugs following LOE. We observe the number of manufacturers entering the production of newly generic specialty drugs ranges between two and five per molecule in the years following LOE, which is generally less than that observed historically for non-specialty drugs. However, the existence of time-varying and unobservable contract manufacturing practices complicates the definition of "manufacturers" entering this market. We use pooled time s...
October 2011The Effect of FDA Advisories on Branded Pharmaceutical Firms' Valuations and Promotion Efforts
with Haiden A. Huskamp, Ernst R. Berndt: w17528
The US Food and Drug Administration (FDA) expends considerable efforts in regulating medications approved for use. Yet the impact of medication labeling changes on brand pharmaceutical products, and whether and what firms do to respond to increased information regarding the safety and efficacy of a drug, have not be characterized. We propose a behavioral framework for examining the effects of FDA advisories on branded pharmaceutical firms and their products. We empirically assess the impact of recent FDA advisories on the stock market valuations of a sample of branded pharmaceutical manufacturing firms using event study methods. We examine whether and how branded pharmaceutical manufacturers respond to an advisory by assessing changes in promotion compared to non-affected firms. We fin...

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