Jakub Červený, Jan van Ours, 28 September 2019

With the recent trends in legalisation and with the transition of illegal drug markets to the internet, much more detailed information about the price and quality of cannabis is now available, making an analysis of the determinants of prices easier. This column analyses data collected over a two-week period in 2015 from a dark web marketplace, which details about 500 cannabis prices from around 140 sellers in 18 countries. It concludes that the internet-based cannabis market is characterised by monopolistic competition, where many sellers offer differentiated products with quality variation causing dispersion of cannabis prices. 

Rena Conti, Ernst Berndt, David Howard, 25 March 2015

Total US prescription drug spending rose 13% in 2014, the biggest increase in a decade. Driving this trend is spending on branded specialty drugs, which rose an unprecedented 31%. This column discusses recent research into the relationship between inflation-adjusted launch prices and survival benefits and approval year for 58 anticancer drugs approved in the US between 1995 and 2013. The authors find that launch prices are going up by $8,500 per year, approximately 12% year over year.

Iain Cockburn, Jean Lanjouw, Mark Schankerman, 22 November 2014

Patented pharmaceuticals diffuse across international borders slowly, and sometimes not at all. This column analyses the effect of patent protection and price regulation on the speed of and extent to which drugs enter new markets. There is a fundamental tradeoff between affordability – taking the form of low patent protection and strong price regulation – and rate of entry into a national market.

Amir Attaran, Roger Bate, Ginger Jin, Aparna Mathur, 09 October 2014

There is a perception amongst pharmaceutical experts that some Indian manufacturers and/or their distributors segment the global medicine market into portions that are served by different quality medicines. This column finds that drug quality is poorer among Indian-labelled drugs purchased inside African countries than among those purchased inside India or middle-income countries. Substandard drugs – non-registered in Africa and containing insufficient amounts of the active ingredient – are the biggest driver of this quality difference.

Daniel Bennett, Wes Yin, 14 August 2014

Many drugs sold in poor countries are counterfeit or substandard, endangering patients’ health and fostering drug resistance. Since drug quality is difficult to observe, pharmacies in weakly regulated markets may have little incentive to improve quality. However, larger markets allow firms to reorganise production and invest in technologies that reduce the marginal cost of quality. This column discusses how the entry of a new pharmacy chain in India led incumbents to both cut prices and raise drug quality.

Joan Costa-i-Font, Alistair McGuire, Nebibe Varol, 10 May 2014

Generic medicines are cheaper than their branded counterparts, offering potential savings in healthcare budgets. Medicine-price regulation plays an important role in the expansion of the market for generic medicines. This column presents new evidence that higher levels of price regulation, by lowering the expected price to generic manufacturers, lead (ceteris paribus) to greater delays in generic entry.

Jan van Ours, Ali Palali, 12 October 2013

The decriminalisation of cannabis is a policy that divides policymakers sharply. This column uses evidence from the Netherlands to show a positive connection between early cannabis use and easy access to cannabis through coffeeshops. The policy implications, however, require further research. Closing coffeeshops could result in some potential users searching in the black market where hard drugs are available as well.

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