Full metadata
Title
Impact of R&D Expenditure on Pharmaceutical Drug Prices: A Cross-Country Comparison
Description
Over the past few decades, pharmaceutical spending has been increasing, due in large part to high prices of prescription drugs. In the United States, pharmaceutical manufacturers defend high prices by citing the high costs of research and development, which they argue spurns innovation and makes up for the high prices paid by consumers. This study seeks to determine the validity of that claim and to fully understand the impact that R&D expenditures have on pharmaceutical drug prices. Employing a fixed effects regression, this study assesses the relationship between per capita R&D expenditure and per capita pharmaceutical spending (a stand-in variable for average drug price) for twelve OECD-member countries over a span of seven years. Holding country and year effects fixed, this regression shows a nearly one to one positive relationship between R&D expenditure and pharmaceutical spending, meaning a one-dollar increase in R&D expenditure increases pharmaceutical spending by around one-dollar as well. This impact, while statistically significant, is not that large, implying that R&D expenditures are not a strong driver of drug prices, contrary to what many pharmaceutical manufacturers argue.
Date Created
2018-05
Contributors
- Martin, John Behun (Author)
- Hill, Alexander (Thesis director)
- Foster, William (Committee member)
- Economics Program in CLAS (Contributor)
- Barrett, The Honors College (Contributor)
Topical Subject
Resource Type
Extent
23 pages
Language
eng
Copyright Statement
In Copyright
Primary Member of
Series
Academic Year 2017-2018
Handle
https://hdl.handle.net/2286/R.I.48004
Level of coding
minimal
Cataloging Standards
System Created
- 2018-04-20 12:11:51
System Modified
- 2021-08-11 04:09:57
- 3 years 3 months ago
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