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Abstract #151764
Audio (mp3) recordingMaggie Huff-Rousselle, MA, MBA, PhD, Social Sectors Development Strategies, Inc., 1411 Washington Street, Suite 6, Boston, MA 02118, +1 617 421 9644, mhuffrousselle@ssds.net
The health sector is plagued by market distortions and failures, characteristics that can profoundly impact public health, especially for those goods and services that are a public good. The multiple barriers to market entry, and the inability of consumers to make adequately informed decisions in the health market, combine to give suppliers significant control over consumer demand. This is not always beneficial. These market failures and distortions are more pronounced in the pharmaceutical sub-sector where: 1) there is little incentive for R&D focused on the major health problems of the most disenfranchised segments of the world's populations, since such investments are unlikely to result in profitable business initiatives; 2) a lack of neutrality and transparency in providing scientific information means that, not only can consumers not make well-informed decisions, but physicians' prescribing decisions are also not adequately informed; 3) the cost of obtaining patent rights and the market muscle of patents in an era of globalization (along with capital investment issues) can reinforce barriers to market entry; and, 4) the barriers to market entry combined with the inability of both consumes and physicians to make informed decisions give suppliers tremendous influence over demand. Based on a literature review and a session of the World Bank's Flagship Course on Health Sector Reform and Sustainable Financing, this presentation parallels a classic article, Abnormal Economics in the Health Sector, in examining pharmaceutical market dynamics. Policy implications call for national and international regulatory interventions and the provision of appropriate incentives for industry.
Learning Objectives:
- Understand how barriers to market entry and information asymmetry between patients, physicians (acting as agents) and the pharmaceutical industry (retail-wholesaler-manufacturer) lead to market failure and distortion in which suppliers can induce demand through both agents (physicians) and directly to consumers.
- Explain how the frequent lack of price signals/sensitivity and the various commercial incentives for actors in the market influence and distort demand, and create incentives for corruption and fraud.
Keywords: Policy/Policy Development, Drugs
Presenting author's disclosure statement:
Any relevant financial relationships? No
Any institutionally-contracted trials related to this submission?
I agree to comply with the American Public Health Association Conflict of Interest and Commercial Support Guidelines, and to disclose to the participants any off-label or experimental uses of a commercial product or service discussed in my presentation.
The 135th APHA Annual Meeting & Exposition (November 3-7, 2007) of APHA