Pharmaceutical Markets and Insurance Worldwide

Pharmaceuticals have become an integral part of health care, leading to rising global expenditures. This requires governments and large health plans to reconsider how prescription drugs are integrated into traditional health insurance. In many developed countries, national health care systems are introducing cost-sharing, consumer choice, negotiated prices, and other market mechanisms into their prescription drug coverage. In the more market-oriented U.S. health care system, prescription drug benefits were only recently added to the Medicare program, while further expansion of drug benefits will likely occur as health care reform gains momentum. The book begins with insights into pharmaceutical policies in OECD countries and lessons from the United Kingdom and Germany where comparative effectiveness research is used as a policy tool. Additional case studies of national health care systems in the Netherlands, Israel, and Taiwan are also presented. Pharmaceutical markets in these countries are exposed to reference pricing, managed competition, and global budgeting. Several chapters are devoted to the U.S. health care system. The impact of the Medicare prescription drug benefit on private insurer competition is evaluated. The effects of cost-sharing on prescription adherence, adverse selection, and generic-brand substitution are examined through the lens of chronic conditions, ranging from diabetes to multiple sclerosis. The book concludes with special topics that employ microeconomic foundations such as bargaining theory and social welfare analysis to problems related to the interactions between pharmaceutical markets and public insurance plans. The broad perspectives in this volume will be useful to policymakers, industry strategists, researchers, and students alike.