Indicate whether each statement is true or false, and justify your answer.After passage of the Kefauver–Harris Amendment in 1962, the number of new chemical entities introduced into the US market by pharmaceutical companies dropped substantially.
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Indicate whether each statement is true or false, and justify your answer.
After passage of the Kefauver–Harris Amendment in 1962, the number of new chemical entities introduced into the US market by pharmaceutical companies dropped substantially.
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- Indicate whether each statement is true or false, and justify your answer.In the US, drug companies receive a patent of 100 years for each drug they develop. This allows them a prolonged legal monopoly on the sale of that drug.Indicate whether each statement is true or false, and justify your answer.The Food and Drug Administration (FDA) decides whether to approve a drug for use in the US based in part on whether each drug is cost-effective in the treatment of some disease.Which of the following statements about expenditures on advertising is true? If a firm knows its product is of low quality, it will be willing to spend large amounts of money on advertising. When a firm spends a small amount of money on advertising, this signals that the quality of the good is high. When a firm spends a large amount of money on advertising, advertising can be construed as a signal of quality. Read the following example and determine whether it illustrates a common critique or defense of advertising. Gilberto sees a commercial for a Brand X clothing company that depicts the wearers of the clothes out having a good time with friends. Although he doesn't particularly need new clothes, the commercial prompts him to buy a Brand X t-shirt. This illustrates a common of advertising.
- Indicate whether each statement is true or false, and justify your answer.If a government wishes to maximize the rate of pharmaceutical innovation, it should offer non-expiring patents to drug companies.Indicate whether the statement is true or false, and justify your answer.Many countries in the world have experienced increases in the number of obese individuals in their population, but only the US has seen increases in childhood obesity.Indicate whether the statement is true or false, and justify your answer.Higher values of the Herfindahl–Hirschman Index indicate higher levels of competition in those markets.
- Should there be one $/QALY for an entire country? How would you expect drug companies to react to price limits set by public programs?Indicate whether the statement is true or false, and justify your answer.Physicians have no say in what prices to charge their patients.Pharmaceutical Benefits Managers (PBMs) are intermediaries between upstream drug manufacturers and downstream insurance companies. They design formularies (lists of drugs that insurance will cover) and negotiate prices with drug companies. PBMs want a wider variety of drugs available to their insured populations, but at low prices. Suppose that a PBM is negotiating with the makers of two nondrowsy allergy drugs, Claritin and Allegra, for inclusion on the formulary. The “value” or “surplus” created by including one nondrowsy allergy drug on the formulary is $80 million, but the value of adding a second drug is only $24 million. Assume the PBM bargains by telling each drug company that it's going to reach an agreement with the other drug company. Under the non-strategic view of bargaining, the PBM would earn a surplus of _____________ million, while each drug company would earn a surplus of _______________ million. Now suppose the two drug companies merge. What is the…
- All of the following are true, except a. Some consumers may infer high quality from high price b. Low prices can indicate lower quality given that no other information is available c. Promotional campaigns do not affect consumer’s perception on quality d. It makes more sense to raise price when advertising makes demand less elasticIn some countries, such as Canada and UK, direct-to-consumer (DTC) advertising for pharmaceutical products is illegal or tightly controlled. Which of the following is NOT a reason why DTC is tightly controlled? Question 7 options: Asymmetric information: consumers are not in a good position to determine if a drug is what they need. DTC makes patients aware of new remedies. DTC can put a strain on doctor-patient relationship when patients demand some drugs that are not necessary or not the best options. DTC have the potential to drive up spending on drugs and exacerbate moral hazard.Licensure requirements give physicians a monopoly privilege to practice medicine. As such, they have certain responsibilities and obligations. True False