A Proposal to Improve the Health Care Systems for the Urban Poor in the Squatter Settlements of the Developing Countries

Rapid urbanization and large scale population movements from rural to urban areas have resulted in unprecedented health crises in the developing countries. In addition to communicable diseases, respiratory infections and malnutrition, psycho-social stresses due to marginalization and exclusion from social activities and employment prospects are also prevalent. Considering the rate of urban growth rate and the rapid increase in the percentage of the poor living in urban areas, the debilitating effects of health crises and urban poverty are going to exacerbate if no precautions are taken. In this respect, it is a critical point in time to come up with effective health care strategies for the urban poor. This document provides an insight into the reasons behind the current health problems of the urban poor and the determinants of health in developing countries, and proposes use of operations research to come up with handling strategies for the major subdivisions of the health problem in the developing world

Does Pharmaceutical Price Regulation Affect the Adoption of Generic Competition? Evidence from the OECD, 1999-2008

Generic competition in the pharmaceutical market is an effective cost-containment mechanism that improves static efficiency and stimulates pharmaceutical innovation. There is no prior study that has empirically analysed the relative delays in adoption of generic competition. This paper aims to investigate how price regulations in the OECD affect the adoption of generic competition following the first global generic launch of each molecule. Drawing upon data from 1999 to 2008, we estimate the impact of ex-ante price and market size expectations on the probability of generic launch using discrete-time duration modelling with cloglog and logit regressions. The econometric strategy employs both parametric and non-parametric duration dependence and includes controls for generic competition in each country, firm characteristics and molecule heterogeneity. Ex-ante profit expectations result in faster adoption; both expected price and market size increase the probability of launch. Our findings suggest that neither molecule nor firm characteristics have a significant effect on generic adoption across different specifications. Instead, evidence indicates that generic competitors follow a locally oriented strategy in contrast to research-intensive pharmaceutical firms.generic competition, regulation, adoption, discrete-time duration analysis

Regulation and adoption dynamics of pharmaceutical technologies: evidence from the OECD, 1999-2008

This thesis examines adoption of pharmaceutical technologies across the major OECD markets during 1999-2008, a period that has witnessed substantial R&D productivity shortfalls and increasing supply-side pressure on pharmaceutical pricing. The advent of the financial crisis in 2008 has resulted in even more stringent pricing and reimbursement (P&R) regulations to contain costs and ensure value for money in pricing decisions. The central theoretical question addressed, therefore, is how price regulation affects cross-national adoption dynamics of pharmaceutical technologies. I address the impact of regulation on: i) innovative technologies, i.e. patent-protected new molecules that are central to dynamic efficiency, and ii) imitative generic technologies, i.e. lower-priced bioequivalent products that are central to static efficiency. The research in this thesis was motivated by the lack of theoretical framework or empirical evidence on the dynamics of international technology adoption in general and marked delay patterns in the adoption of pharmaceutical technologies observed in practice. It is important to understand the regulatory factors driving these delays given the profound implications of such delays on consumer and producer welfare as well as healthcare provider/payer budgets. The main hypothesis in this thesis is that price controls negatively affect adoption speed for new molecules and generics in markets that employ price controls as these controls reduce incentives to entry and result in knock-on effects in foreign markets because of linkages such as reference pricing and parallel trade. The empirical strategy adopts difference-in-difference and survival analysis using IMS data from 20 markets and controls for heterogeneity in firm and molecule characteristics. Overall findings indicate that adoption of pharmaceutical technologies is slower in price-controlled markets and that firms adapt their launch strategies to changes in pharmaceutical regulations. Expected market size is a highly significant driver of generic launch hazard, which highlights the importance of demand-side policies to promote generic use

Explaining Early Adoption on New Medicines: Regulation, Innovation and Scale

Understanding how price regulations affect the adoption of new patent-protected pharmaceutical technologies is a crucial question in designing health systems. This paper addresses this question by examining how price expectations shape the probability of launch, controlling for competition, market size expectations, firm and molecule heterogeneity across the major OECD markets during 1999-2008. Due to the censoring of launch data we use discrete time duration modelling with parametric and semi-parametric duration dependence specification. A sub-sample analysis including only EU countries also investigates the impact of price interdependencies and potential firm strategies in launch and pricing decisions. The empirical analysis of the global set of molecules which have diffused across more than 10 markets in the OECD, suggests there is a statistically significant and robust price effect in the adoption of new pharmaceutical technologies; low-prices result in reduced and slower adoption. Concentrated therapeutic subgroups, reflecting market crowding constitutes a significant barrier to entry. Sub-sample findings from the EU market suggest strategic firm behaviour with firms delaying launch in low-priced markets and attempts to maintain price differentials across interdependent markets to a minimum due to price complementarities. Firm economies of scale and the therapeutic importance of innovations are other important drivers of adoption speed.pharmaceutical innovation, regulation, adoption, duration analysis

Regulation effects on the adoption of new medicines

This paper analyses the impact of reimbursement regulation on launch times in the adoption of new medicines in a sample of OECD countries and a subsample of European countries. The latter also allows examination of price spillover effects, given that pharmaceutical product reimbursement regulation commonly benchmarks from prices in other countries. We empirically focus on the relative delays imposed by regulation on the adoption of a global set of molecules, which have diffused across more than 10 markets in the OECD over the period 1999-2008, controlling for various confounding effects. Through examining time to launch across a number of markets, and controlling for a number of confounding influences, we find that price and reimbursement regulations appear to delay the adoption of new pharmaceutical products. We also find the existence of interdependencies in pricing may have a further indirect effect of such regulation on launch times. Firm economies of scale, the therapeutic importance of specific product innovations and market size are found to counter the delaying impact of price and reimbursement regulation on new medicines adoption

Do international launch strategies of pharmaceutical corporations respond to changes in the regulatory environment?

This paper investigates how regulation impinges on the launch strategies of international pharmaceutical corporations for new molecules and generics across the main OECD markets during 1960-2008. Comprehensive IMS data is used to analyze the international diffusion of 845 molecules from 14 different anatomic therapeutic categories using non-parametric survival analysis. The paper focuses on two main regulatory changes that reshaped the barriers to entry substantially: the US Hatch-Waxman Act in 1984 and the establishment of the European Medicines Agency (EMA) in 1995. We find that legal transaction costs have a significant impact on timing of launch. Stringent market authorization requirements for new pharmaceutical products in the US after 1962 resulted in a significant US drug lag in the introduction of pharmaceutical innovation vis-à-vis Europe during 1960-1984. However, financial incentives of the 1984 Hatch-Waxman Act proved effective in closing this lag. A more streamlined EMA regulatory approval process has reduced barriers to entry in Europe enabling quicker diffusion of pharmaceutical products, yet a marked pattern of delay in adoption of innovation is still evident due to local differences in pricing regulations. New molecule launch strategically takes place first in higher-priced EU markets as a result of threat of arbitrage and price dependency across the member states. Finally, the impact of price controls on the launch timing of pharmaceutical innovation translates to the adoption of imitative pharmaceutical products-hampering access not only to new technologies but also to cost-saving substitute products

Does pharmaceutical price regulation affect the adoption of generic competition?: evidence from the OECD, 1999-2008

Generic competition in the pharmaceutical market is an effective cost-containment mechanism that improves static efficiency and stimulates pharmaceutical innovation. There is no prior study that has empirically analysed the relative delays in adoption of generic competition. This paper aims to investigate how price regulations in the OECD affect the adoption of generic competition following the first global generic launch of each molecule. Drawing upon data from 1999 to 2008, we estimate the impact of ex-ante price and market size expectations on the probability of generic launch using discrete-time duration modelling with cloglog and logit regressions. The econometric strategy employs both parametric and non-parametric duration dependence and includes controls for generic competition in each country, firm characteristics and molecule heterogeneity. Ex-ante profit expectations result in faster adoption; both expected price and market size increase the probability of launch. Our findings suggest that neither molecule nor firm characteristics have a significant effect on generic adoption across different specifications. Instead, evidence indicates that generic competitors follow a locally oriented strategy in contrast to research-intensive pharmaceutical firms

Inventory deployment and market area segmentation in a two-echelon distribution network design

Thesis (S.M.)--Massachusetts Institute of Technology, Sloan School of Management, Operations Research Center, 2004.Includes bibliographical references (p. 125-128).Most of the logistics systems involve a multi-level distribution system structure due to value added by a multi-level configuration. Interactions of these levels, i.e. echelons, should be considered while making strategic decisions regarding the choice of the size, number and location of stocking sites as well as the tactical decision regarding the choice of inventory policy to be used. We analyze a two-echelon distribution network to characterize the market segmentation of each echelon and inventory deployment between the two-levels. Allocation of stock under a stochastic demand structure is considered simultaneously with warehousing and transportation decisions, which is an extension of the General Optimal Market Area (GOMA) Model developed by Erlenkotter. The distribution of inventory is investigated under different stock policies and the sensitivity of this distribution to various system parameters is analyzed.by Nebibe Varol.S.M

Price regulation and relative delays in generic drug adoption

Increasing the adoption of generic drugs has the potential to improve static efficiency in a health system without harming pharmaceutical innovation. However, very little is known about the timing of generic adoption and diffusion. No prior study has empirically examined the differential launch times of generics across a comprehensive set of markets, or more specifically the delays in country specific adoption of generics relative to the first country of (generic) adoption. Drawing on data containing significant country and product variation across a lengthy time period (1999 to 2008), we use duration analysis to examine relative delays, across countries, in the adoption of generic drugs. Our results suggest that price regulation has a significant effect on reducing the time to launch of generics, with faster adoption in higher priced markets. The latter result is dependent on the degree of competition and the expected market size