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EMR20: The Economics of Pharmaceuticals, Part 1

2018

In the first of two videos on the economics of the pharmaceutical industry, Professor David Cutler asks students to consider the types of prices that pharmaceutical companies set for their medications, the implications of higher and lower prices, and how to think about this in a global society. He explains basic economic concepts (e.g., demand, supply, marginal cost, willingness to pay, etc.) in an accessible manner using two simple examples. The first case focuses on antiretroviral drugs that are absolutely necessary for the target population of HIV-infected patients. How does the pharmaceutical company set the price? Does it matter if the country is wealthy or poor? The second case focuses on antihypertensive drugs which will be of varying value within the target population since some people need them more and some need them less. How does the pharmaceutical company set the price in this case? Both cases represent a static context (i.e., the drug already exists). A second video is available that addresses the "dynamic" context.

Videos prototyped and produced in collaboration with the Global Health Education and Learning Incubator at Harvard University (GHELI) as part of a residency in pedagogical innovation and multimodal learning.

 

Related Files:

Source:

Cutler D. EMR20: The Economics of Pharmaceuticals, Part 1. Video. Global Health Education and Learning Incubator at Harvard University 2018; Sep. https://vimeo.com/294199099