Economics of Innovation

Since we began our project to consult experts on the impact of H.R. 3. on pharmaceutical innovation the CBO has released a...

As we have discussed in the previous blogs...

Hitch, J., Firth, I., Hampson, G., Jofre-Bonet, M., Garau, M., Garrison, L. and Cookson, G.


Consulting Report
September 2021

The US spends more on healthcare than any other country in the world. H.R. 3 is a recent policy proposal aimed at reducing national spending on prescription drugs, one component of overall healthcare spending. Drug manufacturers would be required to negotiate prices with the US government, and prices would be capped at a level based on the prices of the drug in a set of foreign countries. Evaluation of a policy with such large potential impact on pharmaceutical revenues must consider potential negative effects on incentives to innovate.

In our previous blog we discussed how analyses of the impact of H.R. 3 published by the Congressional Budget Office (CBO) do not reflect the process of investing. Here, the third blog in our Series, we discuss another problem with their analysis: how they measure the output of innovation.

Our second blog in the OHE H.R. 3 Series discusses how the Congressional Budget Office (CBO)’s analysis of H.R.3 does not reflect the reality of biopharmaceutical investing.

US policy makers are discussing an attempt to lower prescription drug spending in the US.

US healthcare reform is frequently on the US presidential policy agenda.

Following the lead from his predecessors, President Obama’s controversial health insurance reform and President Trump’s public acknowledgement for the need for lower drug prices, President Biden has taken up the gauntlet and put the cost of prescription drugs front and centre.

Rodes Sanchez, M., Rachev, B., Spencer, J., Sharma, I., Tantri, A., Towse, A., Mitrovich, R. and Steuten, L.

Consulting Report
September 2021

By placing a strain on health care systems and the global economy, the COVID-19 pandemic clearly shows the need to more comprehensively understand both supply- and demand-side aspects of a “healthy” vaccines market that can meet public health demand over time and across dynamic events. The goal of a healthy vaccines market, as defined for this study, is to support sustainable innovation and equitable access to address public health needs.

The Value in Health May issue includes the paper “How Should the World Pay for a Coronavirus Disease (COVID-19) Vaccine?”. Finalised in December 2020, it includes: an overview of COVID-19 vaccine development; a proposal for a benefit-based advance market commitment (BBAMC) to get the vaccines needed; and proposals for future pandemic preparedness. In this blog, the authors update their thinking to take account of the events of the last 6 months.

Early access schemes enable patients in exceptional need to access therapies that are not yet available through their health system. These schemes were not designed for single-administration therapies. In a report published today, OHE authors present key considerations for developing early access schemes for single-administration therapies.


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