tag:blogger.com,1999:blog-7929690857412739353.post6407103089032173492..comments2015-12-03T15:29:56.337-08:00Comments on Amy Finkelstein Econ 490 fall 2015: Triangle RelationshipAmy Finkelstein Econ 490 fall 2015http://www.blogger.com/profile/00191039314029417698noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-7929690857412739353.post-71757872849991351232015-11-09T09:47:16.193-08:002015-11-09T09:47:16.193-08:00There is a version of the FDA in my country, but t...There is a version of the FDA in my country, but the regulations are more lax and prone to external influence. The patent, however, is extremely effective in regulating proper production of certain drugs.<br />The interesting part is that insurance is nonexistent in our country. So the pricing becomes a major factor in prescribing medicine to patients.Amy Finkelstein Econ 490 fall 2015https://www.blogger.com/profile/00191039314029417698noreply@blogger.comtag:blogger.com,1999:blog-7929690857412739353.post-32444178476537349962015-11-07T06:04:02.372-08:002015-11-07T06:04:02.372-08:00This was a rather terse post. I will try to add s...This was a rather terse post. I will try to add some flesh to it that you may respond to. It seems to me there are at least three different issues about how the market works. One is whether there is regulation for drug approval. In the U.S., the Food and Drug Administration requires rather an arduous procedure to show a drug is effective and has minimal side effects. Doctors can't prescribe drugs until they have FDA approval.<br /><br />The second issue revolves around whether their are generic alternatives to the drugs - low cost competitors. In turn, this has to do with whether the patent on the drug is still in force (in which case there are no generic alternatives) or if the patent has expired. Once the patent expires, the original drug might be priced higher than the generics, and the doctor still prescribes it because the doctor trusts the original drug.<br /><br />The third issue is insurance for prescription drugs. When such insurance is present, the doctors may not be very sensitive to drug price in choosing what to prescribe because the cost is met not by the patient but rather by the insurance company. (There is a deductible that the patient pays, but it may be modest with the bulk of the cost borne by the insurance company.) This is where it is more like a quadrilateral than a triangle, because the insurance company clearly wants the doctor to prescribe low cost alternatives. Professor Arvanhttps://www.blogger.com/profile/15256000730474030475noreply@blogger.com