Spikes in Generic Drug Prices: A Necessary Evil?
The pressure to control health spending is growing as the population ages, and the pharmaceutical market plays a key role, accounting for just under 1% of GDP in Denmark. Across the OECD, spending increased by 50% from 1998 to 2008. Danish spending has grown slower, with one potential explanation being the unique Danish system for pricing generic prescription drugs. However, the Danish system is plagued by short-lived but large increases in drug prices; media reports tell of price increases of over 500%.1 Understanding the causes and implications of these price spikes is the goal of this project. In particular, I will investigate whether the spikes are an inherent feature of the system or something that can and should be avoided.