Pharmaceutical Prices and Political Activity / Sara Fisher Ellison, Catherine Wolfram.

Format:

Book

Author/Creator:

Ellison, Sara Fisher.

Contributor:

National Bureau of Economic Research.

Wolfram, Catherine.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8482.

NBER working paper series no. w8482

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2001.

Summary:

Drug prices have been a conspicuous political issue in much of recent history, but no more so than during health care reform debates in 1993 and 1994. This paper investigates possible effects of political activity on pharmaceutical prices, with a particular focus on the health care reform period. It evaluates the extent to which pharmaceutical companies slowed the rates at which they increased prices in an attempt to preempt government intervention. To do so, we characterize companies based on their vulnerability to future price regulation. We then consider patterns in price movements across companies. The results suggest that companies whose drugs had longer patent lives and who had recently increased contributions to their corporate Political Action Committees (PACs) slowed price increases during 1992 and 1994 more than their competitors. It is difficult to distinguish pricing differences across companies in 1993, perhaps because most companies had pledged to keep price increases below the rate of inflation.

Notes:

Print version record

September 2001.