Health Research and Policy

Research in Progress Seminar (RIP)

Date: September 26, 2012
Time: 1:30 pm - 3:00 pm
Location: CHP/PCOR Conference Room
117 Encina Commons, Room 119, Stanford
Speaker: Dr. Ali Yurukoglu, Assistant Professor of Economics, Graduate School of Business, Stanford
Title: Medicare Reimbursements and Shortages of Sterile Injectable Pharmaceuticals


This paper investigates the rise in shortages of sterile injectable pharmaceutical drugs in the US. I examine a policy change in 2005 that differentially reduced Medicare Part B payments for pharmaceuticals. Drugs that were subject to a greater policy change because they serve older patient populations have had greater increases in shortages. I interpret these results using a model of capacity choice with supply uncertainty. I conclude that Medicare’s generous payments before the policy change provided manufacturers with incentives to invest in capacity or induced entry. The effect on total welfare of lowering payments is theoretically ambiguous.

Please note: All research in progress seminars are off-the-record. Any information about methodology and/or results are embargoed until publication.
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