Economics of the Pharmaceutical Industry

Darius Lakdawalla has an very interesting review article in the Journal of Economic Literature on the Economics of the pharmacuetical industry.  Do read the whole thing, but below I have listed some highlights. A model of firm R&D decisions Lakdawalla uses a simple model based on Nordhaus (1969) to derive some important implications about pharmaceutical…

Off-label prescribing

How frequently are pharmaceuticals used off label?  Perhaps more than you think.  Although these figures are a bit dated, Tabarrok (2000) details the extent of off-label prescribing in the U.S. as follows: According to a study by the U.S. General Accounting Office, 56 percent of cancer patients have been given non-FDA-approved prescriptions, and 33 percent…