Book abstract: Summarizes the literature, and considers the issue of paying for research and development. It reviews research and development costs, regulation, productivity and incentives for innovation. It discusses market demand and pricing, effects of insurance, reimbursement regulation, alternatives to patents, and generics. Further, it reviews trends in promotion, regulation of promotion and its effects. It discusses global issues, including differential pricing and R&D for neglected diseases. The focus is on the US, as the home of the largest number of multinational pharmaceutical and smaller biotech companies. This article notes the important differences in regulatory and reimbursement systems in other countries. Finally it suggests that although there is large and growing literature on the pharmaceutical industry that has produced valuable information, important issues remain for future research.
Berndt, Ernst, and Joseph P. Newhouse. "Pricing and Reimbursement in U.S. Pharmaceutical Markets." The Economics of the Biopharmaceutical Industry. Ed. Patricia M. Danzon and Sean Nicholson. Oxford University Press, 2012.