Healthy Skepticism Library item: 8902

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Journal Article

Steele HB.
Prices and profits in the drug industry: An economist's view
New Physician 1971 Mar; 20:146-159

Abstract:

Economic analyses of competition in the drug industry, supply and demand for prescription drugs, and recommendations to alter marketing and prescribing practices to encourage competition were presented. It is stated that the market characteristics of the drug industry bias it in the direction of inefficient and noncompetitive performance in 5 major respects, each of which is discussed. The major costs incurred by drug manufacturers are categorized and analyzed. The drug market is extremely insensitive to price, and also unusual because of the way demand is mediated through the physician. Seven recommendations for bringing about drug price reforms were presented.