Corruption of Pharmaceutical Markets: Addressing the Misalignment of Financial Incentives and Public Health

30 Pages Posted: 28 Jun 2013 Last revised: 24 Oct 2015

See all articles by Marc-Andre Gagnon

Marc-Andre Gagnon

Carleton University - School of Public Policy and Administration

Date Written: June 27, 2013

Abstract

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

Gagnon, Marc-Andre, Corruption of Pharmaceutical Markets: Addressing the Misalignment of Financial Incentives and Public Health (June 27, 2013). Journal of Law, Medicine and Ethics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2286415

Marc-Andre Gagnon (Contact Author)

Carleton University - School of Public Policy and Administration ( email )

Ottawa, Ontario
Canada

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