Market structure and communicable diseases
Identifieur interne : 001B62 ( Istex/Corpus ); précédent : 001B61; suivant : 001B63Market structure and communicable diseases
Auteurs : Stéphane MechoulanSource :
- Canadian Journal of Economics/Revue canadienne d'économique [ 0008-4085 ] ; 2007-05.
English descriptors
- Teeft :
- Aggressive subsidization strategy, Analytical framework, Anonymous referee, Antibiotic, Antibiotic resistance, Certain threshold, Communicable, Communicable disease, Communicable diseases, Communicable diseases figure, Competitive price, Competitive pricing, Constant price, Current treatment, Development economics, Different cases, Different paths, Discount factor, Disease eradication, Disease transmission, Drug resistance, Economic epidemiology, Economic theory, Epidemiology, Eradication, Exogenous, Exogenous infection rate, External effects, Externality, Fitness deficit, Future market, General case, Health economics, Heterogeneous agents, High values, Important implications, Infectious diseases, Infinite horizon model, Initial patent expiration, Initial prevalence, Intellectual property rights, Laxminarayan, Main results, Mandatory treatment, Marginal cost, Market power, Market structure, Mechoulan, Mechoulan figure, Modelling resistance, Monopolist, Monopolist prices, Monopolistic pricing, Monopoly power, Monopoly price, Monopoly pricing, Natural recovery, Negative externality, Next period, Numerical simulations, Objective function, Optimal choice, Optimal price, Other diseases, Other words, Perfect competition, Pharmaceutical industry, Philipson, Planner, Policy implications, Positive externality, Present value, Prevalence, Prevalence path, Prevalence paths, Price paths, Prices increase, Pricing, Product effectiveness, Public economics, Public policy, Resistance path, Resistant strain, Resistant strains, Resistant types, Simulation, Social planner, Social planning, Solid line, Steady state, Technology assessment, Transmission function, Vaccination, Vaccine, Welfare comparisons, Welfare cost, Welfare difference, Welfare implications, Welfare outcomes.
Abstract
Abstract. Communicable diseases pose a formidable challenge for public policy. Using numerical simulations, we show under which scenarios a monopolist's price and prevalence paths converge to a non‐zero steady state. In contrast, a planner typically eradicates the disease. If eradication is impossible, the planner subsidizes treatments as long as the prevalence can be controlled. Drug resistance exacerbates the welfare difference between monopoly and first best outcomes. Nevertheless, because the negative externalities from resistance compete with the positive externalities of treatment, a mixed competition/monopoly regime may perform better than competition alone. This result has important implications for the design of many drug patents.
Les maladies contagieuses posent un défi important à la politique publique. A l'aide de simulations numériques, on montre dans quels scénarios les prix de monopole et le sentier de prévalence tendent à engendrer un régime permanent où la maladie ne disparaît pas. Un planificateur typiquement élimine la maladie. Si l'éradication est impossible, le planificateur subventionne les traitements aussi longtemps que la prévalence peut être contrôlée. La résistance au remède agrandit l'écart de bien‐être entre le cas du monopole et l'optimum. Cependant comme les effets externes négatifs de la résistance au traitement sont en conflit avec les effets externes positifs des traitements, un régime mixte concurrence/monopole peut donner de meilleurs résultats que la seule concurrence. Ce résultat a des implications importantes pour l'élaboration de nombreux brevets pharmaceutiques.
Url:
DOI: 10.1111/j.1365-2966.2007.00417.x
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ISTEX:8654630AEF9E6D39B289B4322362BF18D5BA1455Le document en format XML
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Communicable diseases pose a formidable challenge for public policy. Using numerical simulations, we show under which scenarios a monopolist's price and prevalence paths converge to a non‐zero steady state. In contrast, a planner typically eradicates the disease. If eradication is impossible, the planner subsidizes treatments as long as the prevalence can be controlled. Drug resistance exacerbates the welfare difference between monopoly and first best outcomes. Nevertheless, because the negative externalities from resistance compete with the positive externalities of treatment, a mixed competition/monopoly regime may perform better than competition alone. This result has important implications for the design of many drug patents.</div><div type="abstract" xml:lang="es">Les maladies contagieuses posent un défi important à la politique publique. A l'aide de simulations numériques, on montre dans quels scénarios les prix de monopole et le sentier de prévalence tendent à engendrer un régime permanent où la maladie ne disparaît pas. Un planificateur typiquement élimine la maladie. Si l'éradication est impossible, le planificateur subventionne les traitements aussi longtemps que la prévalence peut être contrôlée. La résistance au remède agrandit l'écart de bien‐être entre le cas du monopole et l'optimum. Cependant comme les effets externes négatifs de la résistance au traitement sont en conflit avec les effets externes positifs des traitements, un régime mixte concurrence/monopole peut donner de meilleurs résultats que la seule concurrence. 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Communicable diseases pose a formidable challenge for public policy. Using numerical simulations, we show under which scenarios a monopolist's price and prevalence paths converge to a non‐zero steady state. In contrast, a planner typically eradicates the disease. If eradication is impossible, the planner subsidizes treatments as long as the prevalence can be controlled. Drug resistance exacerbates the welfare difference between monopoly and first best outcomes. Nevertheless, because the negative externalities from resistance compete with the positive externalities of treatment, a mixed competition/monopoly regime may perform better than competition alone. 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<ref target="http://www.tei-c.org/">We use TEI</ref></desc></application></appInfo></encodingDesc><profileDesc><abstract xml:lang="en" style="main"><p><hi rend="bold">Abstract. </hi> Communicable diseases pose a formidable challenge for public policy. Using numerical simulations, we show under which scenarios a monopolist's price and prevalence paths converge to a non‐zero steady state. In contrast, a planner typically eradicates the disease. If eradication is impossible, the planner subsidizes treatments as long as the prevalence can be controlled. Drug resistance exacerbates the welfare difference between monopoly and first best outcomes. Nevertheless, because the negative externalities from resistance compete with the positive externalities of treatment, a mixed competition/monopoly regime may perform better than competition alone. This result has important implications for the design of many drug patents.</p></abstract><abstract xml:lang="es" style="main"><p>Les maladies contagieuses posent un défi important à la politique publique. A l'aide de simulations numériques, on montre dans quels scénarios les prix de monopole et le sentier de prévalence tendent à engendrer un régime permanent où la maladie ne disparaît pas. Un planificateur typiquement élimine la maladie. Si l'éradication est impossible, le planificateur subventionne les traitements aussi longtemps que la prévalence peut être contrôlée. La résistance au remède agrandit l'écart de bien‐être entre le cas du monopole et l'optimum. Cependant comme les effets externes négatifs de la résistance au traitement sont en conflit avec les effets externes positifs des traitements, un régime mixte concurrence/monopole peut donner de meilleurs résultats que la seule concurrence. Ce résultat a des implications importantes pour l'élaboration de nombreux brevets pharmaceutiques.</p></abstract><textClass><keywords xml:lang="en"><term xml:id="k1">I18</term><term xml:id="k2">L12</term></keywords><keywords rend="tocHeading1"><term>Original Articles</term></keywords></textClass><langUsage><language ident="en"></language></langUsage></profileDesc><revisionDesc><change when="2019-12-20" who="#istex" xml:id="pub2tei">formatting</change></revisionDesc></teiHeader></istex:fulltextTEI><json:item><extension>txt</extension><original>false</original><mimetype>text/plain</mimetype><uri>https://api.istex.fr/ark:/67375/WNG-N178LT1P-S/fulltext.txt</uri></json:item></fulltext><metadata><istex:metadataXml wicri:clean="Wiley, elements deleted: body"><istex:xmlDeclaration>version="1.0" encoding="UTF-8" standalone="yes"</istex:xmlDeclaration><istex:document><component version="2.0" type="serialArticle" xml:lang="en"><header><publicationMeta level="product"><publisherInfo><publisherName>Blackwell Publishing Inc</publisherName><publisherLoc>Malden, USA</publisherLoc></publisherInfo><doi origin="wiley" registered="yes">10.1111/(ISSN)1540-5982</doi><issn type="print">0008-4085</issn><issn type="electronic">1540-5982</issn><idGroup><id type="product" value="CAJE"></id><id type="publisherDivision" value="ST"></id></idGroup><titleGroup><title type="main" sort="CANADIAN JOURNAL ECONOMICS/REVUE CANADIENNE D ECONOMIQUE">Canadian Journal of Economics/Revue canadienne d'économique</title></titleGroup></publicationMeta><publicationMeta level="part" position="05002"><doi origin="wiley">10.1111/caje.2007.40.issue-2</doi><numberingGroup><numbering type="journalVolume" number="40">40</numbering><numbering type="journalIssue" number="2">2</numbering></numberingGroup><coverDate startDate="2007-05">May/mai 2007</coverDate></publicationMeta><publicationMeta level="unit" type="article" position="6" status="forIssue"><doi origin="wiley">10.1111/j.1365-2966.2007.00417.x</doi><idGroup><id type="unit" value="CAJE417"></id></idGroup><countGroup><count type="pageTotal" number="25"></count></countGroup><titleGroup><title type="tocHeading1">Original Articles</title></titleGroup><eventGroup><event type="firstOnline" date="2007-05-14"></event><event type="publishedOnlineFinalForm" date="2007-05-14"></event><event type="xmlConverted" agent="Converter:BPG_TO_WML3G version:2.3.9 mode:FullText" date="2010-06-24"></event><event type="xmlConverted" agent="Converter:WILEY_ML3G_TO_WILEY_ML3GV2 version:3.8.8" date="2014-01-08"></event><event type="xmlConverted" agent="Converter:WML3G_To_WML3G version:4.1.7 mode:FullText,remove_FC" date="2014-10-15"></event></eventGroup><numberingGroup><numbering type="pageFirst" number="468">468</numbering><numbering type="pageLast" number="492">492</numbering></numberingGroup><linkGroup><link type="toTypesetVersion" href="file:CAJE.CAJE417.pdf"></link></linkGroup></publicationMeta><contentMeta><countGroup><count type="figureTotal" number="10"></count><count type="tableTotal" number="0"></count><count type="formulaTotal" number="59"></count><count type="referenceTotal" number="34"></count><count type="linksCrossRef" number="97"></count></countGroup><titleGroup><title type="main">Market structure and communicable diseases</title><title type="shortAuthors">S. Mechoulan</title><title type="short"><i>Market structure and communicable diseases</i></title><title type="main" xml:lang="fr"><!--xml:lang="fr" added by WileyML 3Gv2 convertor--><i>Structure de marché et maladies contagieuses.</i></title></titleGroup><creators><creator creatorRole="author" xml:id="cr1" affiliationRef="#a1"><personName><givenNames>Stéphane</givenNames><familyName>Mechoulan</familyName></personName></creator></creators><affiliationGroup><affiliation xml:id="a1"><unparsedAffiliation>Department of Economics, University of Toronto</unparsedAffiliation></affiliation></affiliationGroup><keywordGroup xml:lang="en"><keyword xml:id="k1">I18</keyword><keyword xml:id="k2">L12</keyword></keywordGroup><abstractGroup><abstract type="main" xml:lang="en"><p><b>Abstract. </b> Communicable diseases pose a formidable challenge for public policy. Using numerical simulations, we show under which scenarios a monopolist's price and prevalence paths converge to a non‐zero steady state. In contrast, a planner typically eradicates the disease. If eradication is impossible, the planner subsidizes treatments as long as the prevalence can be controlled. Drug resistance exacerbates the welfare difference between monopoly and first best outcomes. Nevertheless, because the negative externalities from resistance compete with the positive externalities of treatment, a mixed competition/monopoly regime may perform better than competition alone. This result has important implications for the design of many drug patents.</p></abstract><abstract type="main" xml:lang="es"><p>Les maladies contagieuses posent un défi important à la politique publique. A l'aide de simulations numériques, on montre dans quels scénarios les prix de monopole et le sentier de prévalence tendent à engendrer un régime permanent où la maladie ne disparaît pas. Un planificateur typiquement élimine la maladie. Si l'éradication est impossible, le planificateur subventionne les traitements aussi longtemps que la prévalence peut être contrôlée. La résistance au remède agrandit l'écart de bien‐être entre le cas du monopole et l'optimum. Cependant comme les effets externes négatifs de la résistance au traitement sont en conflit avec les effets externes positifs des traitements, un régime mixte concurrence/monopole peut donner de meilleurs résultats que la seule concurrence. Ce résultat a des implications importantes pour l'élaboration de nombreux brevets pharmaceutiques.</p></abstract></abstractGroup></contentMeta><noteGroup><note xml:id="n-fnt-1" numbered="no"><p>For helpful comments, suggestions, and discussions I thank Joe Altonji, Chris Auld, Gadi Barlevy, Don Dewees, Gérard Gaudet, Dino Gerardi, David Howard, Morton Kamien, Istvan Konya, Stuart Levy, Charles Mallory, Robert McMillan, John Panzar, Tomas Philipson, Paul Rubin, Nicolas Sahuguet, Aloysius Siow, Yossef Spiegel, Mark Stabile, Matt Turner, seminar participants at Guelph, Queen's, Health Canada, Waterloo, the third IHEA conference and the second CHESG workshop. The reports of two anonymous referees improved an earlier draft considerably. Konstatin Rybakov provided exceptional research assistance. All remaining errors are mine. Email: <email>s.mechoulan@utoronto.ca</email></p></note></noteGroup></header></component></istex:document></istex:metadataXml><mods version="3.6"><titleInfo lang="en"><title>Market structure and communicable diseases</title></titleInfo><titleInfo lang="fr"><title>Structure de marché et maladies contagieuses.</title></titleInfo><titleInfo type="abbreviated" lang="en"><title>Market structure and communicable diseases</title></titleInfo><titleInfo type="alternative" contentType="CDATA" lang="en"><title>Market structure and communicable diseases</title></titleInfo><titleInfo type="alternative" contentType="CDATA" lang="fr"><title>Structure de marché et maladies contagieuses.</title></titleInfo><name type="personal"><namePart type="given">Stéphane</namePart><namePart type="family">Mechoulan</namePart><affiliation>Department of Economics, University of Toronto</affiliation><role><roleTerm type="text">author</roleTerm></role></name><typeOfResource>text</typeOfResource><genre type="article" displayLabel="article" authority="ISTEX" authorityURI="https://content-type.data.istex.fr" valueURI="https://content-type.data.istex.fr/ark:/67375/XTP-6N5SZHKN-D">article</genre><originInfo><publisher>Blackwell Publishing Inc</publisher><place><placeTerm type="text">Malden, USA</placeTerm></place><dateIssued encoding="w3cdtf">2007-05</dateIssued><copyrightDate encoding="w3cdtf">2007</copyrightDate></originInfo><language><languageTerm type="code" authority="rfc3066">en</languageTerm><languageTerm type="code" authority="iso639-2b">eng</languageTerm></language><physicalDescription><extent unit="figures">10</extent><extent unit="tables">0</extent><extent unit="formulas">59</extent><extent unit="references">34</extent><extent unit="linksCrossRef">97</extent></physicalDescription><abstract lang="en">Abstract. Communicable diseases pose a formidable challenge for public policy. Using numerical simulations, we show under which scenarios a monopolist's price and prevalence paths converge to a non‐zero steady state. In contrast, a planner typically eradicates the disease. If eradication is impossible, the planner subsidizes treatments as long as the prevalence can be controlled. Drug resistance exacerbates the welfare difference between monopoly and first best outcomes. Nevertheless, because the negative externalities from resistance compete with the positive externalities of treatment, a mixed competition/monopoly regime may perform better than competition alone. This result has important implications for the design of many drug patents.</abstract><abstract lang="es">Les maladies contagieuses posent un défi important à la politique publique. A l'aide de simulations numériques, on montre dans quels scénarios les prix de monopole et le sentier de prévalence tendent à engendrer un régime permanent où la maladie ne disparaît pas. Un planificateur typiquement élimine la maladie. Si l'éradication est impossible, le planificateur subventionne les traitements aussi longtemps que la prévalence peut être contrôlée. La résistance au remède agrandit l'écart de bien‐être entre le cas du monopole et l'optimum. Cependant comme les effets externes négatifs de la résistance au traitement sont en conflit avec les effets externes positifs des traitements, un régime mixte concurrence/monopole peut donner de meilleurs résultats que la seule concurrence. 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