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In 2011, the Food and Drug Administration made the controversial decision not to enforce the Orphan Drug Act’s period of market exclusivity for Makena (hydroxyprogesterone caproate injection), clearing the way for patients to continue to access the drug in compounded form. This chapter situates the FDA's decision in the context of rising concern about the price of orphan drugs and evaluates a number of policy levers that Congress could deploy in response, including shortening the Act's exclusivity period, allowing for limited competition during the exclusivity period, and implementing a cap on drug prices.

This chapter examines the disproportionately high spending on pharmaceuticals in Japan. It presents evidence regarding the effects of price distortions on resource allocation in the health care sector. The estimates indicate that the magnitude of these effects exceeds 20 percent, and may be as high as 50 percent, of drug costs. It then shows that the government's attempts to control drug prices directly are at best ineffective, as they have been offset by drug-switching effects in most drug groups. These drug-switching effects are in turn induced by the built-in profit margins for “new” drugs, which are generously priced by regulators. The conclusions are based on statistical analyses of the first comprehensive microdata set compiled in Japan.

This chapter provides a detailed examination of pharmaceutical pricing strategies in the United States. It points out that pharmaceutical expenditure as a share of total healthcare spending has historically been quite low in comparison to that of hospitalization and physician services. It identifies several common measures of pharmaceutical prices, and highlights the difference in conclusions reached based on different measures. It offers a critical review of several models used to explain pharmaceutical price behavior, which are grouped into three major categories: market structure models, R&D cost-based models, and product quality or value based models. The chapter concludes that prices of brand-name drugs in the United States are largely driven by product quality attributes, not cost of R&D. Lastly, the chapter examines the impact of generic entry on price.

Policies that prohibit manufacturers from charging high prices for drugs potentially hinder patients’ access to drugs. Popular concerns about high drug prices cannot generally justify policies that interfere with voluntary exchanges between patients and pharmaceutical manufacturers because the pharmaceutical industry is normatively different from other industries. And even if drug manufacturers did have special duties to promote patients’ health, such duties could not justify limits on drug prices. Intellectual property protections also consist in government interference with voluntary transactions between patients and manufacturers. Whether this form of interference is justified will depend on whether intellectual property laws benefit patients more than alternative systems or whether patents protect producers’ rights.

This chapter comments on doctors' propensity to overprescribe, a practice known as polypharmacy. Polypharmacy simply means “many drugs,” and may be quite appropriate in certain cases, such as an elderly patient with an end-stage failing heart and requires six or eight medications plus supplemental oxygen therapy. However, too many prescriptions can cause serious allergic reactions and other problems for the patient. The chapter discusses the pitfalls of polypharmacy as well as its implications for the proper usage of pharmacopoeia. It also considers drug therapy as a physician's uniquely tailored form of care for an individual patient, the problem of exorbitant drug prices, the debate over direct advertising by Big Pharma, and the relationship between doctors and “drug reps.” Finally, the chapter emphasizes the important roles of the Food and Drug Administration and primary care physicians in addressing the problems associated with polypharmacy.

Affordability, accessibility, availability, and rationality of medicines are a big challenge in India. Notwithstanding the tag of 'pharmacy of the developing world', the India story is one of poverty and poor access among plenty. The pharma market in India is riven by market failures due to asymmetries of various kinds: between patients, doctors, and pharmaceutical companies. Expecting the market to regulate itself will not work and proactive state intervention is necessary in pricing and provision of medicines and health care services to deal with the extraordinary crisis of public health in India.

This chapter reviews the main problems and the available evidence concerning the relationships between IPRs, innovation and welfare in pharmaceuticals. In the first part, it examines first—as a necessary background—the historical evolution of the industry, the factors which sustained its tremendous growth in the post-War World II years, and the problems that the industry is currently facing. Then it looks at the evolution of the IPR regime in the last 30 years. Next, it moves to a discussion of the main theoretical arguments in favour and against (strong) IPRs in pharmaceuticals and present the little direct available empirical evidence, concerning respectively innovation and drug prices. The second part of the chapter focuses on TRIPS and Access to Care in developing countries, with particular reference to the post 2005 issues.

This chapter discusses the quest for an effective treatment for AIDS and efforts to provide universal access to treatment. In the early 1980s there were no effective treatments against viruses on the market, except acyclovir for herpes simplex and amantadine for influenza. The discovery of antiretroviral therapy in the 1990s changed the lives of millions of people living with HIV, as well as how the world perceived AIDS and the epidemic. HIV infection was no longer a death sentence, and there was hope that one day the epidemic could be stopped. Since then more than thirty antiretroviral drugs have been marketed. In 1999 and 2000 the first generic antiretrovirals arrived on the world market, mainly produced in India by companies such as Cipla and Ranbaxy. This move by the Indian generic industry fundamentally changed access to medicines in low-income countries, in particular sub-Saharan Africa, by introducing generic price competition of drugs still under patent. In 2000 major pharmaceutical laboratories also agreed to lower the price of antiretrovirals for low-income countries as part of the UNAIDS-WHO Accelerating Access Initiative.

This chapter analyses the political economy of continuity in Argentina’s minimalist response to the new global order in intellectual property. The choices made in the 1990s facilitated Argentina’s largest drug firms’ adjustment to the eventual introduction of drug patenting. Accumulated resources allowed the local sector to shape the Argentinean patent system in the 2000s, as the focal point of conflict moved from how to introduce pharmaceutical patents to how the patent system functions. Argentina continued to buck external pressures for over-compliance, and the patent office’s procedures for examining pharmaceutical patent applications underwent changes too. Argentina’s local firms worked closely with the Executive to secure these outcomes. The chapter also considers the downside of extensive producer power, and the limitations of Executive agency, by considering the Health Ministry’s inability to reform other aspects of the pharmaceutical market against the wishes of the local sector.

This chapter focuses on the emergence of the AIDS pandemic. It covers the emergence of symptoms associated with HIV, the discovery of the virus, and the understanding of its transmission. It emphasizes the importance of AIDS activists in acceleration of the development of drugs that changed the disease from a terminal to chronic disease. AIDS activists throughout the world then worked together to fight for equitable distribution of AIDS treatment. The movement drew an explicit connection between the AIDS pandemic and the right to health and succeeded in garnering novel funding for global health delivery. AIDS changed many things in global health, from patient-led activism to drug discovery to the long-term provision of care. In this book, the global health era is defined as the period after 2000, when AIDS activism helped shift the health paradigm in impoverished countries from prevention only to the delivery of health care.

Shilts joins The San Francisco Chronicle as its first openly gay reporter on the newsroom staff. Hired to cover the “gay beat” in San Francisco, Shilts also is given general assignment stories. Shilts coordinates Chronicle coverage of the deadly October 1989 Loma Prieta earthquake. Newsroom colleagues overcome suspicions of the new “gay reporter” as Shilts lobbies publishers for non-discrimination policies and domestic partner benefits. Shilts picks up on rumors of a “gay cancer” affecting gay men in the Castro district. Reporting includes very first stories attempting to link exotic immune system related diseases with homosexual men in San Francisco and elsewhere. Shilts is becomes convinced the AIDS story is a major story and devotes himself nearly full-time to the subject.