title: Impact of the fourth hurdle on the international pharmaceutical industry.
abstract: Traditionally, pharmaceutical companies were required to provide evidence to demonstrate their product's safety, efficacy and quality for purposes of registration and reimbursement. Increasingly, a fourth hurdle has been added which requires that companies demonstrate the economic value of a product to be reimbursed. This paper provides empirical observations and anecdotes, as well as economic theory to explain the impact of the fourth hurdle on the pharmaceutical industry. Specifically, the paper discusses the impact on drug development, clinical trials, sales, launches, corporate value, human resources and access to new medicines by patients. Using game theory, the potential for suboptimal investment in pharmacoeconomics by the pharmaceutical industry will be explored through a theoretical application of the prisoner's dilemma model. The paper concludes with a hypothetical example for calculating the monetary impact of the fourth hurdle on society when making formulary decisions related to three drugs within a therapeutic class.
authors.affiliation: Dept. of Pharmacy Practice and Science, 515 W Lombard St., 2nd Floor, Baltimore, Maryland, MD 21201- 1563, USA. dmullins@rx.umaryland.edu
authors.forename: C Daniel
authors.initials: CD
authors.lastname: Mullins
authors.forename: Elizabeth M
authors.initials: EM
authors.lastname: Ndiritu
authors.forename: David M
authors.initials: DM
authors.lastname: Yoder
authors.forename: Fadia T
authors.initials: FT
authors.lastname: Shaya
authors.forename: Teisha A
authors.initials: TA
authors.lastname: Taylor