ThePublicFinancingofPharmaceuticalsThePublicFinancingofPharmaceuticalsAnEconomicApproachEditedbyJaumePuig-JunoyResearchCentreforEconomicsandHealth(CRES),DepartmentofEconomicsandBusiness,PompeuFabraUniversity,SpainEdwardElgarCheltenham,UK•Northampton,MA,USA©JaumePuig-Junoy2005Allrightsreserved.Nopartofthispublicationmaybereproduced,storedinaretrievalsystemortransmittedinanyformorbyanymeans,electronic,mechanicalorphotocopying,recording,orotherwisewithoutthepriorpermissionofthepublisher.PublishedbyEdwardElgarPublishingLimitedGlensandaHouseMontpellierParadeCheltenhamGlosGL501UAUKEdwardElgarPublishing,Inc.136WestStreetSuite202NorthamptonMassachusetts01060USAAcataloguerecordforthisbookisavailablefromtheBritishLibraryLibraryofCongressCataloguinginPublicationDataThePublicfinancingofpharmaceuticals:aneconomicapproach/editedbyJaumePuig-Junoy.p.cm.1.Pharmaceuticalindustry—Governmentpolicy—UnitedStates.2.Pharmaceuticalindustry—UnitedStates—Finance.3.Drugs—Research—UnitedStates—Finance.I.Puig-Junoy,Jaume.HD9666.6.P832005338.4´7615´0973—dc222004058627ISBN1845420888TypesetbyCambrianTypesetters,Frimley,SurreyPrintedandboundinGreatBritainbyMPGBooksLtd,Bodmin,CornwallContentsListoffiguresviiListoftablesviiiContributorsxListofabbreviationsxii1Introduction:Publicpharmaceuticalexpenditure1J.Puig-JunoyPARTI2Incentivesforinnovationinthepharmaceuticalmarket21P.IbernRegàs3Priceregulationsystemsinthepharmaceuticalmarket35J.Puig-Junoy4Regulationandcompetitioninpharmaceuticalmarkets59J.R.BorrellArqué,A.CostasComesañaandR.NonellTorres5Mechanismstoencouragepricecompetitioninthepharmaceuticalmarketandtheireffectsonefficiencyandwelfare84J.RoviraFornsandJ.DarbàCollPARTII6Referencepricingasapharmaceuticalreimbursementmechanism103G.López-CasasnovasandJ.Puig-Junoy7Insuranceinpublicfinancingofpharmaceuticals124B.GonzálezLópez-Valcárcel8Economicevaluationandpharmaceuticalpolicy145J.L.PintoPradesandX.BadíaLlach9Pre