Template-type: ReDIF-Paper 1.0
Author-Name: Daems, Rutger
Author-Workplace-Name: Planet Strategy Group
Author-Name: Maes, Edith
Author-Email: edith.maes@telenet.be
Author-Workplace-Name: Maastricht School of Management, and Planet Strategy Group
Author-Name: Ramani, Shyama V.
Author-Email: ramani@merit.unu.edu
Author-Workplace-Name: UNU-MERIT, and Maastricht University
Title: Global Framework for Differential Pricing of Pharmaceuticals
Abstract: This paper examines how equitable, differentiated pricing can improve 
	 access to and affordability of medicines, particularly in low- and 
	 middle-income countries, and how governments and supranational agencies 
	 can create an environment that enables pharmaceutical companies to 
	 operate a sustainable business model benefitting all key stakeholders. 
	 Using value-based pricing techniques in combination with a non-linear 
	 function that captures national income parameters as defined in the 
	 Human Development Index together with health system variables, the 
	 authors have developed an integrated pricing policy framework. The 
	 degree to which the proposed framework offers a sustainable solution to 
	 the problem of access to medicines depends on: the economic development 
	 status of a country, the value of a particular medicine to its 
	 therapeutic class and the incidence of the relevant disease, and the 
	 extent to which market segmentation can be applied. This paper further 
	 argues that for equitable, differential pricing to succeed, policymakers 
	 and lawmakers must design and implement a regulatory and legislative 
	 framework that prevents leakage through parallel trade and price 
	 referencing between affluent and poorer segments when discounts are 
	 applied.
Classification-JEL: D43, L11, L65, O12, O15
Keywords: globalization, pharmaceuticals, pharmaceutical industry,
	 public policy, corporate strategy, pricing, access, equity
Series: UNU-MERIT Working Papers
Creation-Date: 2011
Number: 2011-054
File-URL: https://unu-merit.nl/publications/wppdf/2011/wp2011-054.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2011054