Strategies and impacts of new drug introduction: hemophilia treatment.

This study examines the impact of the manufacturers' pricing strategy on the growing spending in the drug industry in the case of hemophilia treatment. Testable hypotheses of non-competitive pricing policies are posited to examine whether drug companies manipulate the prices of new drugs at each stage of market adoption. Then, we empirically examine our hypotheses using data from a regional hemophilia drug-purchasing consortium over an eight-year period. The key finding confirms that the pharmaceutical companies engage in non-competitive pricing behavior to maximize their profit given the limited competition in the market. The implications of the findings are considered.