A Lecture on the Pharmaceutical Industry in the United States
Yunwei Gai and Lidija Polutnik
Babson College, USA
Volume 14: 2019, pp. 221-244; ABSTRACT
The U.S. accounts for over 40% of the global spending on pharmaceuticals. This lecture provides students an overview of the U.S. pharmaceutical industry, its stakeholders (e.g., drug manufacturers, government, insurers, and pharmacy benefit managers), and their dynamics in the context of regulatory and competitive market realities. We discuss the complexity of its supply chain, stakeholder goals, the R&D process, the relevant analytical framework, the costs and benefits of drugs, as well as outcomes such as drug prices, which have often been perceived as unfair, unethical, and criticized for their lack of transparency. This lecture includes extensive resources, including book chapters, papers, websites, and videos, allowing instructors to adjust the content depending on their courses’ learning goals. This lecture was part of an MBA elective course, Health Economics, for students interested in the health industry. It has been used three semesters with highly positive feedback. This lecture can be used alone or in combination with the following case, Sovaldi: Pricing of New Products and Consequences.
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