Corruption of Pharmaceutical Markets: Addressing the Misalignment of Financial Incentives and Public Health
30 Pages Posted: 28 Jun 2013 Last revised: 24 Oct 2015
Date Written: June 27, 2013
This paper explains how the current architecture of the pharmaceutical markets has created a misalignment of financial incentives and public health that is a central cause of harmful practices. It explores three possible solutions to address that misalignment: taxes, increased financial penalties, and drug pricing based on value. Each proposal could help to partly realign financial incentives and public health. However, because of the limits of each proposal, there is no easy solution to fixing the problem of financial incentives.
Keywords: institutional corruption, pharmaceutical markets, therapeutic innovation, business model, financial incentive, public health, financial penalties, tax, reference-based pricing, value-based pricing
JEL Classification: D21, I11, I18, L65, O61
Suggested Citation: Suggested Citation