Market structure and communicable diseases
Identifieur interne : 003960 ( Main/Exploration ); précédent : 003959; suivant : 003961Market structure and communicable diseases
Auteurs : Stéphane Mechoulan [Canada]Source :
- 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
Affiliations:
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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. Ce résultat a des implications importantes pour l'élaboration de nombreux brevets pharmaceutiques.</div></front></TEI><affiliations><list><country><li>Canada</li></country><region><li>Ontario</li></region><settlement><li>Toronto</li></settlement><orgName><li>Université de Toronto</li></orgName></list><tree><country name="Canada"><region name="Ontario"><name sortKey="Mechoulan, Stephane" sort="Mechoulan, Stephane" uniqKey="Mechoulan S" first="Stéphane" last="Mechoulan">Stéphane Mechoulan</name></region></country></tree></affiliations></record>Pour manipuler ce document sous Unix (Dilib)
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