Fuqua School of Business
Durham, NC 27708-0120
NBER Working Papers and Publications
|October 2013||Pharmaceutical Followers|
with Peter Arcidiacono, Paul B. Ellickson, Peter Landry: w19522
We estimate a model of drug demand and supply that incorporates insurance, advertising, and competition between branded and generic drugs within and across therapeutic classes. We use data on antiulcer drugs from 1991 to 2010. Our simulations show generics and ``me-too'' drugs each increased consumer welfare more than $100 million in 2010, holding insurance premiums constant. However, insurance payments in 2010 fell by nearly $1 billion due to generics and rose by over $7 billion due to me-too antiulcer drugs.
Published: Arcidiacono, Peter & Ellickson, Paul B. & Landry, Peter & Ridley, David B., 2013. "Pharmaceutical followers," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 538-553. citation courtesy of
|April 2012||The Role of Government Reimbursement in Drug Shortages|
with Ali Yurukoglu, Eli Liebman: w17987
Beginning in the mid-2000s, the incidence of drug shortages rose, especially for generic injectable drugs such as anesthetics and chemotherapy treatments. We examine whether reimbursement changes contributed to the shortages, focusing on a reduction in Medicare Part B reimbursement to providers for drugs. We hypothesize that lower reimbursement put downward pressure on manufacturers’ prices which reduced manufacturers’ incentives to invest in capacity, reliability, and new launches. We show that, after the policy change, shortages rose more for drugs with (i) higher shares of patients insured by Medicare, (ii) greater decreases in provider reimbursement, and (iii) greater decreases in manufacturer prices.
Published: Ali Yurukoglu & Eli Liebman & David B. Ridley, 2017. "The Role of Government Reimbursement in Drug Shortages," American Economic Journal: Economic Policy, American Economic Association, vol. 9(2), pages 348-382, May. citation courtesy of