Economics of Industry

Health Economics delivered a paper to the Pharmaceutical Sciences Section of the Australian and New Zealand Association for the Advancement of Science at the Academy of Sciences in Canberra. The burden of this paper was that it was a fundamental misconception to believe that price competition was lacking in the prescription medicine market, at least in the context of the British National Health Service.

The physical health and longevity of the people of countries such as Britain has improved dramatically during the course of the past 100 years. In the middle and later decades of the 19th Century the average Englishman had at birth a life expectancy of around 40 years. Today it is nearly 70 years. In 1898 the pioneer social investigator Seebohm Rowntree recorded in a survey in York an infant mortality of 247 per 1,000 live births amongst the poorest class and one of 94 per 1,000 amongst the well-to-do.

Out of £868 minion spent on the revenue account of the hospital service in England and Wales in 1970, £242 million, or a little over one quarter, was spent on supplies of goods and equipment. Table 1 shows the breakdown of spending by the nine broad categories which have been used for accounting under the National Health Service. These are the only comprehensive data available at the national level, though they are unable to reflect the diversity of medical and non-medical goods purchased, from boiler fuel to pharmaceuticals and from food to surgical instruments.

By 1990, the total cost of the National Health Service will probably have reached about £10,000 million of which about £1,300 million will be for medicines prescribed by general practitioners and hospital doctors. At 1968 prices the corresponding figures would be about £4,500 million and £600 million.

Over  the  past  few  years  there  has  been  a  growing  concern  with Britain’s record of industrial innovation based upon technology.  This stems from two factors.  Firstly, it is increasingly appreciated that the UK’s  success,  if  not  survival,  as  a  trading  nation  depends  upon  its ability  to  produce  and  sell  new  products  which  are  more  advanced, more  efficient,  or  of  better&n

This book contains the third series of Winter Lectures organised by the Office of Health Economics, and the first to be given after the publication of the 'Sainsbury Report'. Mr Freeman in his foreword to the volume containing the second series wrote: 'Not unnaturally some of the papers are concerned to justify the policies and practices of the principal firms in the industry.'

ONE of the problems in Britain today is that too little of its academic research is associated with successful innovation in industry. The result is that we have contributed generously to the world stock of fundamental knowledge, but we have failed to benefit commensurately in terms of earnings from the sale of innovations in world markets.

Symposium held at the Imperial College of Science and Technology by the Office of Health Economics

Based on a series of six lectures discussing some of the special considerations which arise when a science based industry has the government as a major customer in its home market, with particular reference to the relationship between the pharmaceutical industry and the National Health Service. The book challenges conventional attitudes to costing, pricing and marketing which in the past have been applied to science-based industry. The first paper discusses the influence of patents on the pattern of progress.

The explosive progress of medical science during the past twenty-five years has brought about a revolution in the health of the community and in the problems of sickness, disability and premature death. The discovery of new medicines and the development of new medical techniques extensively influence the total and the pattern of National Health Service expenditure, which in turn is a reflection of the changes in the procedures of medical care.