A General-Equilibrium Analysis of Public Policy for Pharmaceutical Prices

Retail sales of prescription drugs totaled $154.5 billion in 2001. The National Institute for Health Care Management estimates annual sales will exceed$400 billion by the year 2010. This paper analyzes the welfare and distributional effects of two policy families that could be used to cope with high and rising pharmaceutical costs. We employ a general-equilibrium approach to contrast the current patented-monopoly system with a) a price ceiling imposed on the pharmaceutical sector of the economy; and b) a universal insurance program covering pharmaceutical purchases. We use a version of the Kelton and Wallace (1995) monopoly production environment: a two-good general-equilibrium model in which a license is required to produce one of the goods. Individuals in the model are heterogeneous with respect to preferences, but have identical production technologies and labor resources. Results indicate potential welfare gains for both the price-ceiling and universal-insurance policies, with very distinct distributional effects.

Using NAICS to Identify National Industry Cluster Templates for Applied Regional Analysis

Whereas FESER and BERGMAN, 2000, developed the concept of national-level cluster templates and introduced a systematic methodology to identify such clusters, their technique and results were based on the now-outdated Standard Industrial Classification (SIC) system for categorizing industries. We update their results using the 1997 Benchmark Input-Output Accounts for the United States, which are based on the North American Industry Classification System (NAICS). Since the treatment of services is much more comprehensive under NAICS, we are able to expand on the Feser and Bergman manufacturing templates to identify more comprehensive mixed-sector templates. The cluster templates we determine can provide a foundation for regional economic development strategies.

A general-equilibrium analysis of public policy for pharmaceutical prices

Retail sales of prescription drugs totaled $154.5 billion in 2001. The National Institute for Health Care Management estimates annual sales will exceed$400 billion by the year 2010. This paper analyzes the welfare and distributional effects of two policy families that could be used to cope with high and rising pharmaceutical costs. We employ a general-equilibrium approach to contrast the current patented-monopoly system with a) a price ceiling imposed on the pharmaceutical sector of the economy; and b) a universal insurance program covering pharmaceutical purchases. We use a version of the Kelton and Wallace (1995) monopoly production environment: a two-good general-equilibrium model in which a license is required to produce one of the goods. Individuals in the model are heterogeneous with respect to preferences, but have identical production technologies and labor resources. Results indicate potential welfare gains for both the price-ceiling and universal-insurance policies, with very distinct distributional effects

Using NAICS to identify national industry cluster templates for applied regional analysis

Whereas FESER and BERGMAN, 2000, developed the concept of national-level cluster templates and introduced a systematic methodology to identify such clusters, their technique and results were based on the now-outdated Standard Industrial Classification (SIC) system for categorizing industries. We update their results using the 1997 Benchmark Input-Output Accounts for the United States, which are based on the North American Industry Classification System (NAICS). Since the treatment of services is much more comprehensive under NAICS, we are able to expand on the Feser and Bergman manufacturing templates to identify more comprehensive mixed-sector templates. The cluster templates we determine can provide a foundation for regional economic development strategies