Adrian K. Towse
Office of Health Economics
Southside, 7th Floor
105 Victoria St.
London SW1E 6QT
NBER Working Papers and Publications
|December 2012||Value-Based Differential Pricing: Efficient Prices for Drugs in a Global Context|
with Patricia M. Danzon, Jorge Mestre-Ferrandiz: w18593
This paper analyzes pharmaceutical pricing between and within countries to achieve second best static and dynamic efficiency. We distinguish countries with and without universal insurance, because insurance undermines patients' price sensitivity, potentially leading to prices above second-best efficient levels. In countries with universal insurance, if each payer unilaterally sets an incremental cost effectiveness ratio (ICER) threshold based on its citizens' willingness to pay for health; manufacturers price to that ICER threshold; and payers limit reimbursement to patients for whom a drug is cost-effective at that price and ICER, then the resulting price levels and use within each country and price differentials across countries are roughly consistent with second best static and dynamic ...
Published: Patricia Danzon & Adrian Towse & Jorge Mestre‐Ferrandiz, 2015. "Value‐Based Differential Pricing: Efficient Prices for Drugs in a Global Context," Health Economics, John Wiley & Sons, Ltd., vol. 24(3), pages 294-301, 03. citation courtesy of
|June 2011||Pharmaceutical Pricing in Emerging Markets: Effects of Income, Competition and Procurement|
with Patricia M. Danzon, Andrew W. Mulcahy: w17174
This paper analyzes determinants of ex-manufacturer prices for originator and generic drugs across a large sample of countries. We focus on drugs to treat HIV/AIDS, TB and malaria in middle and low income countries (MLICs), with robustness checks to other therapeutic categories and other countries. We examine effects of per capita income, income dispersion, number and type of therapeutic and generic competitors, and whether the drugs are sold to retail pharmacies vs. tendered procurement by NGOs.
The cross-national income elasticity of prices is 0.4 across high and low income countries, but is only 0.15 between MLICs, implying that drugs are least affordable relative to income in the lowest income countries. Within-country income inequality contributes to relatively high prices in MLIC...
Published: “Pharmaceutical pricing in emerging markets: Effects of income, competition, and procurement” with Andrew W. Mulcahy and Adrian K. Towse. Health Economics 2013. DOI: 10.1002/hec.3013 citation courtesy of