ABSTRACT

This chapter discusses some fundamental aspects of drug market access and pricing and the reasons why drug pricing is so different from other industries. Many of the observations provide a basis for understanding the host of issues. The chapter shows how drug pricing is uniquely different from pricing in other industries due to a number of reasons, including the 'dinner for three' phenomenon and its competitive market implications. It explains that global drug pricing is highly complex as government controls and international trade aspects make for difficult trade-offs. The industry cost structure and humanistic considerations related to access to healthcare further add to sometimes emotional reactions to trade-off decisions. In every healthcare system, drug companies must obtain regulatory approval or market authorization before they can promote prescription drugs. The chapter also explains government interference on drug market access and pricing, and the complexities of global drug pricing.