An Economic Analysis of the Appropriateness of Cost Accounting Method as a Method for Calculating NHI Drug Prices for Innovative Drugs
Hiroshi Nakamura (Graduate School of Business Administration, Keio University)
(No.7: Published in July 2001)
The cost accounting method applied to the determination of drug prices for innovative new drugs that have no similar existing drugs has an impact on pharmaceutical companies oriented toward the research and development of innovative drugs. Focusing on the cost accounting method, this study analyzes the issues and impacts of the cost accounting method on the understanding of costs, the R&D incentives and post-marketing surveillance of drugs in the pharmaceutical industry, and the impact on corporate activities of drug dissemination. The results of the analysis indicated that the appropriateness of the cost accounting method as a form of drug pricing for innovative drugs with no similar existing drugs needs to be reconsidered for the reasons listed below.