title: Pharmaceutical price controls and minimum efficacy regulation: evidence from the United States and Italy.
abstract: OBJECTIVE
  This article examines the relationship between drug price and drug quality and how it varies across two of the most common regulatory regimes in the pharmaceutical market: minimum efficacy standards (MES) and a mix of MES and price control mechanisms (MES + PC).
  
  
  METHODS
  Our primary data source is the Tufts-New England Medical Center-Cost Effectiveness Analysis Registry which have been merged with price data taken from MEPS (for the United States) and AIFA (for Italy).
  
  
  METHODS
  Through a simple model of adverse selection we model the interaction between firms, heterogeneous buyers, and the regulator.
  
  
  RESULTS
  The theoretical analysis provides two results. First, an MES regime provides greater incentives to produce high-quality drugs. Second, an MES + PC mix reduces the difference in price between the highest and lowest quality drugs on the market.
  
  
  CONCLUSIONS
  The empirical analysis based on United States and Italian data corroborates these results.
authors.affiliation: University of Rome Tor Vergata, Rome 00133, Italy. atella@uniroma2.it
authors.forename: Vincenzo
authors.initials: V
authors.lastname: Atella
authors.forename: Jay
authors.initials: J
authors.lastname: Bhattacharya
authors.forename: Lorenzo
authors.initials: L
authors.lastname: Carbonari
mesh_terms: D003363:Cost Control / Q000331:legislation & jurisprudence / Q000592:standards / Q000706:statistics & numerical data; D016527:Drug Costs / Q000331:legislation & jurisprudence* / Q000592:standards / Q000706:statistics & numerical data; D004335:Drug and Narcotic Control / Q000191:economics / Q000331:legislation & jurisprudence* / Q000706:statistics & numerical data; D006801:Humans; D007558:Italy; D008962:Models, Theoretical; D004364:Pharmaceutical Preparations / Q000592:standards*; D014481:United States
chemical_list: D004364:Pharmaceutical Preparations
references.citation: CMAJ. 2003 Feb 18;168(4):433-4
references.pmid: 12591784
references.citation: Health Aff (Millwood). 2003 May-Jun;22(3):31-41
references.pmid: 12757269
references.citation: Health Econ. 2005 Mar;14(3):269-92
references.pmid: 15386651
references.citation: Nat Rev Drug Discov. 2007 Apr;6(4):257-8
references.pmid: 17457995