Paper Looks at Impact of Coverage Policies on Pharma Incentives

July 22, 2020

A recently-published study by Leila Agha, Soomi Kim and Danielle Li analyzes how insurance coverage policies impact incentives for innovation in the pharmaceutical industry.

The study suggests the decision by pharmacy benefit managers in 2012 to adopt “closed formularies” resulted in some pharmaceutical companies reallocating resources away from developing therapeutic classes.

“This move translated into a relative decline in the number of drug candidates that appear more incremental in their therapeutic contribution: that is, those in drug classes with more pre-existing therapies and less scientifically novel research,” the study states.

For more information about the paper, click here.

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