HP424      Half Unit
Pharmaceutical Economics and Policy

This information is for the 2025/26 session.

Course Convenor

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The aim of this course is to introduce students to the economics of pharmaceutical markets and related policies that affect national and international markets broadly. The course will

- Provide students with an understanding of basic features of pharmaceutical markets, how pharmaceutical markets work and how competition manifests itself in different parts of pharmaceutical markets.

- Illustrate to students how the pharmaceutical market is linked to the health care market, why it is often the focus of much regulation, and to help students understand the multidimensional goals of pharmaceutical policies.

- Introduce students to the economic and policy problems encountered in managing pharmaceutical markets and how to evaluate the impact of alternative policy approaches. The course will also give students some experience in critically evaluating the impact of policy on market outcomes.

- Facilitate consideration of various country-specific political, cultural and economic factors that may drive governments' approaches to pharmaceutical regulation. In this context, this course will help students consider the extent to which policies may be transferable.

- Enable students to analyse pharmaceutical markets from the perspectives of several main actors: governments, third party payers, the pharmaceutical industry, doctors, patients, pharmacists and wholesalers. Literature from Health Economics, Industrial Organisation and Health Policy will be incorporated into lectures, discussions and seminars.

- Introduce students to the economics of pricing and reimbursing pharmaceutical products, to explore different models of pricing and reimbursing medicines in OECD countries, including rate of return regulation, value-based pricing, cost-plus pricing, external price referencing and internal reference pricing, among others.

1.5 hours of lectures in the Spring Term.
20 hours of lectures and 10 hours of seminars in the Winter Term.

This course has a reading week in Week 6 of Winter Term.

A formative essay under exam conditions (1 question in 1 hour) will be a requirement and is to be submitted immediately after the revision session.

1. E Mossialos, M Mrazek & T Walley (eds), Regulating Pharmaceuticals in Europe. Striving for Efficiency, Equity and Quality, Buckingham, Open University Press (2004)

2. S O Schweitzer, Pharmaceutical Economics and Policy, Oxford University Press (2006)

3. W S Comanor, 'The Political Economy of the Pharmaceutical Industry', Journal of Economic Literature, XXIV (September): 1178-1217 (1986)

4. F M Scherer 'The Pharmaceutical Industry', Chapter 25, in: A J Culyer & J P Newhouse (Eds), Handbook of Health Economics, Vol 1, Amsterdam, Oxford, Elsevier, 2000.

Further reading:

1. A Acosta, A Ciapponi, Aaserud M, et al (2014). Pharmaceutical policies: effects of reference pricing, other pricing, and purchasing policies. Cochrane Database of Systematic Reviews, 10: CD005979.
2. AS Kesselheim, J Avorn, A Sarpatwari (2016). The high cost of prescription drugs in the United States: origins and prospects for reform. JAMA, 316(8): 858-871.
3. DH Howard, PB Bach, ER Berndt, RM Conti. Pricing in the market for anticancer drugs, 29(1): 139-162.
4. E Mossialos, M Mrazek & T Walley (eds) (2004). Regulating pharmaceuticals in Europe. Striving for efficiency, equity and quality. Open University Press.
5. OJ Wouters, M McKee, J Luyten (2021). Estimated research and development investment needed to bring a new medicine to market, 2009-2018. JAMA, 323(9): 844-853.

Exam (100%), duration: 120 Minutes in the Spring exam period