Lessons from international experience in controlling pharmaceutical expenditure .3. Regulating industry

This is the third of three papers that review international policies to control spending on drugs and to improve the efficiency of drug use. This paper reviews policies regulating the supply of drugs, particularly licensing and reimbursement controls, price and profit regulation. Price and profit controls contain few incentives for improving cost effective use of drugs, and focus on cost containment and profitability of domestic industry. Carefully monitored economic evaluation could lead to improvements in efficiency and benefits to patients and the health care system.