Thomas A. Abbott III
106 Davis Drive
North Wales, PA 19454
Institutional Affiliation: Merck & Company, Inc.
NBER Working Papers and Publications
|January 2006||Who Pays? The Incidence of High Malpractice Premiums|
with Mark Pauly, Christy Thompson, James Margolis, William Sage
in Frontiers in Health Policy Research, Volume 9, David Cutler and Alan Garber, organizers
|February 2005||The Cost of US Pharmaceutical Price Reductions: A Financial Simulation Model of R&D Decisions|
with John A. Vernon: w11114
Previous empirical studies that have examined the links between pharmaceutical price controls, profits, cash flows, and investment in research and development (R&D) have been largely based on retrospective statistical analyses of firm- and/or industry-level data. These studies, which have contributed numerous insights and findings to the literature, relied upon ad hoc reduced-form model specifications. In the current paper we take a very different approach: a prospective micro-simulation approach. Using Monte Carlo techniques we model how future price controls in the U.S. will impact early-stage product development decisions in the pharmaceutical industry. This is done within the context of a net present value (NPV) framework that appropriately reflects the uncertainty associated with R&D ...
Published: Thomas A. Abbott & John A. Vernon, 2007. "The cost of US pharmaceutical price regulation: a financial simulation model of R&D decisions," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(4-5), pages 293-306.