Economics of Health Care Markets and Innovation

Introduction

Medical progress over the last century has undoubtedly improved our well-being. However, the equal access to health care and its economic sustainability are challenged by the scientific revolutions of genetics, the nature and extent of new risks, and the growing externalities across countries that put at risk the production of health care public goods.

Potential of New Technologies

The development of new cell and gene technologies holds the potential for creating therapies for conditions like cancers and genetic diseases. However, the associated costs may be prohibitively high. It is crucial to find ways to provide an environment where such innovations are produced in the most efficient and accessible way.

Challenges in Innovation

Furthermore, the incentives provided by intellectual property protection, which drive innovation, and measures to reduce research and development costs, are vulnerable to international free riding and can be in contradiction with competition policy.

Research Objectives

The objective of this research program is to conduct policy-relevant analyses that address these challenges and contribute to a better understanding of optimal public policies and regulatory interventions.

Research Directions

Several research directions will be pursued focusing on national price regulation. These regulations must consider:

1. Potential cross-country externalities arising from explicit reference pricing used by regulators.
2. International trade considerations.
3. The need to collectively finance socially valuable innovations.

Alternative Pricing Mechanisms

The exploration of alternative pricing mechanisms will be undertaken as potential tools to improve efficiency, including:

• Indication-based pricing
• Quantity-based pricing
• Exclusivity extension rules

Promotion of Pharmaceuticals

Moreover, the promotion of pharmaceuticals, both by the private sector and public entities, will be examined.

Analysis of Policies

Additionally, the research program will involve the analysis of innovation and competition policies, ranging from drug research and development projects to healthcare markets.