Ernst Berndt

Ernst Berndt
Massahusetts Institute of Techology · Alfred P. Sloan School of Management

About

230
Publications
33,691
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18,878
Citations
Citations since 2016
7 Research Items
3721 Citations
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20162017201820192020202120220100200300400500600
20162017201820192020202120220100200300400500600
20162017201820192020202120220100200300400500600

Publications

Publications (230)
Article
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Prescription pharmaceuticals are frequently used consumer products whose manufacturing location is commonly held as a trade secret by firms and US regulatory agencies. Here we use previously non-publicly available data to describe levels and trends in the manufacturing locations of the most commonly used prescription pharmaceuticals, off-patent gen...
Article
We establish four facts concerning competition among US generic drug suppliers, using IQVIA’s National Sales Perspective™ 2004 Q4–2016 Q3 data. We define a unique product market (“molform”), consisting of the combination of a molecule active ingredient and a route of administration formulation, aggregated over different doses and strengths. We find...
Article
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Since the vast majority of prescription drugs consumed by Americans are off patent (‘generic’), their regulation and supply is of wide interest. We describe events leading up to the US Congress's 2012 passage of the Generic Drug User Fee Amendments (GDUFA I) as part of the Food and Drug Administration Safety and Innovation Act (FDASIA). Under GDUFA...
Article
Background: Previous research characterizing factors influencing multiple sclerosis (MS) disease progression has typically been based on time to disease milestones (Kaplan-Meier, Cox hazard regression, etc.). A limitation of these methods is the handling of the often large groups of patients not reaching the milestone. Objective: To characterize...
Article
In the period 2005-13 the US prescription drug market grew at an average annual pace of only 1.8 percent in real terms on an invoice price basis (that is, in constant dollars and before manufacturers' rebates and discounts). But the growth rate increased dramatically in 2014, when the market expanded by 11.5 percent-which raised questions about fut...
Article
Variability in regulatory frameworks, industrial policy, physician/pharmacy autonomy, brand/generic distinctions, and the practice of medicine contribute to ambiguous interpretations of cross-country pharmaceutical cost comparisons. Here, we report cross-country comparisons that: (i) focus on ten therapeutic classes experiencing patent expiration a...
Article
The sales and financial returns realized by pharmaceutical companies are a frequent topic of discussion and debate. In this study we analyzed the economic returns for four cohorts of new prescription drugs launched in the United States (in 1991-94, 1995-99, 2000-04, and 2005-09) and compared fluctuations in revenues with changing average research a...
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In 2011, Bristol-Myers Squibb set the price of its newly approved melanoma drug ipilimumab—brand name Yervoy—at $120,000 for a course of therapy. The drug was associated with an incremental increase in life expectancy of four months. Drugs like ipilimumab have fueled the perception that the launch prices of new anticancer drugs and other drugs in t...
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We present two new findings based on annual antipsychotic US prescribing data from IMS Health on 2867 psychiatrists who wrote 50 or more prescriptions in 2007. First, many of these psychiatrists have prescription patterns that are statistically significantly different than random draws from national market shares for prescriptions by psychiatrists....
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Objective: Physician antipsychotic prescribing behavior may be influenced by comparative effectiveness evidence, regulatory warnings, and formulary and other restrictions on these drugs. This study measured changes in the degree to which physicians are able to customize treatment choices and changes in physician preferences for specific agents aft...
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Background: Spending on physician-administered drugs is high and uses not approved by the US Food and Drug Administration (FDA) are frequent. Although these drugs may be targets of future policy efforts to rationalize use, little is known regarding how physicians respond to emerging safety and effectiveness evidence. Study objective: We analyzed...
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Objective The authors examined physician adoption of second-generation antipsychotic medications and identified physician-level factors associated with early adoption. Methods The authors estimated Cox proportional-hazards models of time to adoption of nine second-generation antipsychotics by 30,369 physicians who prescribed antipsychotics between...
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Pharmaceutical firms heavily promote their products and may have changed marketing strategies in response to reductions in new product approvals, restrictions on some forms of promotion, and the expanding role of biologic therapies. We used descriptive analyses of annual cross-sectional data from 2001 through 2010 to examine direct-to-consumer adve...
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Quality healthcare, as measured by outcomes and costs, needs high-quality diagnostics whose use governs the evidence-based flow of patients from screening to treatment to outcomes monitoring. The current patent, regulatory and reimbursement environment may be inadequate to spur their development, thereby placing in jeopardy the goals of healthcare...
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Cross-country variability in regulatory frameworks, industrial policy, physician/pharmacy autonomy, brand/generic distinctions, and in the practice of medicine contributes to ambiguous interpretations of pharmaceutical cost comparisons. Here we report cross-country comparisons that: (i) focus on 11 therapeutic classes experiencing patent expiration...
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In this article, we present a simple economic model to illustrate the economic challenges facing an oncology stratified medicine developer when scientific discoveries lead to ever smaller, targeted patient populations. We provide preliminary empirical evidence suggesting that at least some developers and their investors are retreating. We then exam...
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Markets for life-saving vaccines do not often generate the most desired outcomes from a public health perspective in terms of product quantity, quality, affordability, programmatic suitability and/or sustainability for use in the lowest income countries. The perceived risks and uncertainties about sustainably funded demand from developing countries...
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Co-developing a drug with a diagnostic to create a stratified medicine - a therapy that is targeted to a specific patient population on the basis of a clinical characteristic such as a biomarker that predicts treatment response - presents challenges for product developers, regulators, payers and physicians. With the aim of developing a shared frame...
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The US Food and Drug Administration (FDA) expends considerable efforts in regulating medications approved for use. Yet the impact of medication labeling changes on brand pharmaceutical products, and whether and what firms do to respond to increased information regarding the safety and efficacy of a drug, have not be characterized. We propose a beha...
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Pharmaceutical companies have long been reluctant to invest in producing new vaccines for the developing world because they have little prospect of earning an attractive return. One way to stimulate such investment is the use of an advance market commitment, an innovative financing program that guarantees manufacturers a long-term market. Under thi...
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We examine the international diffusion of new drugs under the post-TRIPS intellectual property rights regime. Even after controlling for drug characteristics and variation in national health expenditure, we find substantial differences across countries in the probability of a drug being commercially available, lowest in countries such as Brazil, Ch...
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US health care expenditures reached $2.5 trillion in 2009, representing 17.6 percent of gross domestic product (GDP) and $8,086 per person (US Department of Health and Human Services Centers for Medicare and Medicaid Services 2011). Since health care represents a large and growing share of the economy, and factors such as population aging imply tha...
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The pricing of medical products and services in the U.S. is notoriously complex. In health care, supply prices (those received by the manufacturer) are distinct from demand prices (those paid by the patient) due to health insurance. The insurer, in designing the benefit, decides what prices patients pay out-of-pocket for drugs and other products. I...
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Physicians prescribing drugs for patients with schizophrenia and related conditions are remarkably concentrated in their choice among antipsychotic drugs. In 2007 the single antipsychotic drug prescribed by a physician accounted for 66% of all antipsychotic prescriptions written by that physician. Which particular branded antipsychotic was the pres...
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There has been tremendous progress over the last decade in the development of health products--drugs, vaccines, and diagnostics--for neglected diseases. There are now dozens of candidate products in the pipeline. Our purpose is to assess challenges that will arise in later-stage clinical development of these candidate health products and propose a...
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We examine market share and price trends in the quarter century since the 1984 Waxman-Hatch legislation. The generic share of US retail prescriptions has grown from 18.6% in 1984 to 74.5% in 2009, with a notable acceleration in recent years. Whereas in 1994 the generic price index fell from 100 to 65 in the 24 months following initial generic entry...
Article
In this survey chapter on pricing and reimbursement in U.S. pharmaceutical markets, we first provide background information on important federal legislation, institutional details regarding distribution channel logistics, definitions of alternative price measures, related historical developments, and reasons why price discrimination is highly preva...
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While much has been written about the distinctions between biologics and small molecules in terms of their scientific, manufacturing and regulatory experiences, relatively little has been published comparing their clinical and commercial experiences. Employing a data base encompassing all 96 biologics and 212 small molecules newly launched in the U...
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Much has been written about the seemingly less formal, more agile biotechnology industry and its extensive interactions with academia and startups, as well as its distinct scientific, manufacturing and regulatory profile. Employing a data base encompassing all 96 biologics and 212 small molecules newly launched in the U.S. between 1998Q1 and 2008Q4...
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In this paper we show how to adapt the traditional contingent claims valuation techniques to correctly value the firm and its liabilities in the presence of agency costs. This enables us to measure the significance of the agency costs as a function of the quantity of debt outstanding and as a function of the design of the debt contract: with this w...
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Using multiple regression methods, we have undertaken a statistical "benchmark" study comparing system average electricity rates charged by three California utilities with 96 other US utilities over the 1984-93 time period. Although system average electricity rates are much higher in California than for the national average, we conclude that use of...
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The net economic value of increased health care spending remains unclear, especially for chronic diseases. To assess the net value of health care for patients with type 2 diabetes. Economic analysis of observational cohort data. Mayo Clinic, Rochester, Minnesota, a not-for-profit integrated health care delivery system. 613 patients with type 2 diab...
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This paper develops new techniques to assess the expanse of the geographic market under varying supply and demand conditions and applies these techniques to the current wholesale electricity market in the western United States. This paper finds that, by and large, the expanse of the geographic market extends across most of the western United States...
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Annual growth in real prescription drug spending averaged 9.9 percent during 1997-2007 but has slowed since 2003, falling to 1.6 percent in 2007. More patent expirations, increased generic penetration, and reduced new product innovations have contributed to this turning point. We document trends and identify underlying components: declines in the r...
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This paper addresses a longstanding puzzle involving the unbundling of services that has occurred over more than two decades in the U.S. advertising agency industry: How can the shift from the bundling to the unbundling of services be explained and what accounts for the slow pace of change? Using a cost-based theoretical framework of bundling due t...
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Previous research has shown that a manufacturer's promotional strategy for a brand name drug is typically affected by generic entry. However, little is known about how newer strategies to extend patent life, including product reformulation introduction or obtaining approval to market for additional clinical indications, influence promotion. To exam...
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Born in Lithuania and a survivor of the Dachau concentration camp, Zvi Griliches was one of the most important and influential empirical economists of the second half of the 20th century. Griliches’ lifelong research focus involved detailed analyses on the role of technological change as a principal driver of productivity and long-run economic grow...
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"The advent of novel psychotropic medications has revolutionized treatments for mental illnesses over the past few decades. Concurrently, changes in mental health coverage, particularly for Medicaid patients, created economic incentives for insurance carriers to shift costs and to encourage the use of psychotropic drugs. To quantify these effects,...
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It has been documented that the Food and Drug Administration's new drug approvals occur disproportionately in the month of December. We hypothesize that the observed excess December approvals reflects an excess of December New Drug Application (NDA) and Biologics License Application (BLA) submissions. Furthermore, we expect this pattern to have bec...
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We thank Erik Garrison and Elissa Klinger for research assistance, and Ed Seguine and Rafael Campo of Fast-Track Inc. for access to their comparative clinical cost data. Any opinions expressed herein are those of the authors, and not necessarily those of the institutions with whom they are affiliated.
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This research contributes to the literature on the value of health spending by estimating quality-adjusted price indices for treatment of patients with diabetes. We analyze rich data on patient outcomes and actual transaction prices for a sample of 735 patients identified in a large electronic diabetes management database (classified as type 1, typ...
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We report on an exploratory examination of the extent of differences across fifteen countries and three therapeutic classes (antihypertensives, antidepressants and antiepileptics) in the rate at which medicines in general and new medicines in particular are promoted and then diffuse, as well as relative new|old drug prices. We find substantial hete...
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Using the basic tools of intermediate microeconomic theory (such as taught at the level of undergraduate or first-year MBA courses), in this primer I present a framework that helps the reader gain an understanding of economic issues underlying the current political economy debates concerning the impacts on consumers (both US and ex-US) and on presc...
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Aims We estimated what the improved treatment of high blood pressure with anithypertensive drug therapy has contributed to U.S. public health, in terms of reductions in excess premature deaths from cardiovascular disease, myocardial infarctions, and strokes. Methods and Results Using national survey data to estimate blood pressures in the absence...
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The potential to use biomarkers for identifying patients that are more likely to benefit or experience an adverse reaction in response to a given therapy, and thereby better match patients with therapies, is anticipated to have a major effect on both clinical practice and the development of new drugs and diagnostics. In this article, we consider cu...
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The celebrated economist Zvi Griliches’s entire career can be viewed as an attempt to advance the cause of accuracy in economic measurement. His interest in the causes and consequences of technical progress led to his pathbreaking work on price hedonics, now the principal analytical technique available to account for changes in product quality. H...
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We investigate the theoretical possibility and empirical regularity of two troublesome anomalies that frequently arise when cross-price elasticities are estimated for a set of brands expected to be substitutes. These anomalies are the occurrence of: (a) negatively signed cross-elasticities; and (b) sign asymmetries in pairs of cross price elasticit...
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Using national survey data and risk equations from the Framingham Heart Study, we quantify the impact of antihypertensive therapy changes on blood pressures and the number and cost of heart attacks, strokes, and deaths. Antihypertensive therapy has had a major impact on health. Without it, 1999-2000 average blood pressures (at age 40+) would have b...
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Purpose The purpose of this paper is to assess the feasibility and comparability of daily self‐report and objective measures of work performance in complex office tasks, and factors affecting the correlation between these measures. Design/methodology/approach Medical bill auditors provided daily information for 12 weeks through interactive voice r...
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This paper investigates the impact of depression on labor force participation among older workers. Empirically, we use two analytic strategies and rely on a sample drawn from the Health and Retirement Survey. Depression directly and indirectly increases individuals%u2019 probability of retiring early and applying for DI benefits, after accounting f...
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The author provides a political economy interpretation of the rise and fall of public interest in price measurement, placing these developments in the context of the attempt by Congress and the White House to deal with growing deficits in the early to mid-1990s. He provides a detailed discussion of initiatives since the Boskin Commission, such as t...
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Estimating the value of medical innovation is a continual challenge. In this research, we quantify the impact of antihypertensive therapy on U.S. blood pressures, risk and number of heart attacks, strokes, and deaths. We also consider the potential for further improvements. We estimate the value of innovation using equations relating blood pressure...
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Introduction Economists have long emphasized that in health care, identification of the consumer is ambiguous. Is it the patient, the physician acting as a professional agent on behalf of the patient, or is it the third-party payer? In most but not all countries, pharmaceutical manufacturer sales representatives, called “detailers,” are permitted t...
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We analyze labor productivity in coal mining in the United States using indices of productivity change associated with the concepts of panel data modeling. This approach is valuable when there is extensive heterogeneity in production units, as with coal mines. We find substantial returns to scale for coal mining in all geographical regions, and fin...
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Anemia is one of the most common hematologic complications of cancer and cytotoxic treatment. The economic burden associated with anemia in patients with malignancy has not yet been extensively studied. Patients receiving chemotherapy within 6 months of initial cancer diagnosis were identified in a database of commercial health-care service claims...
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Cancer-related anaemia is associated with fatigue that adversely affects patients' everyday functioning and wellbeing. We explore the impact of fatigue on patient productivity and caregiver burden. The analyses are based on data from a randomised, open-label, active-controlled, dose-finding trial of darbepoetin alfa among solid-tumour cancer patien...
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A look at the impact of DTCA on antidepressant medication choices.
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Anaemia is a common haematological complication of cancer and cytotoxic treatment. The incremental economic burden associated with medical care and short-term disability of anaemia in patients with malignancy and receiving chemotherapy has not been well documented. This study evaluates the effect of anaemia on the costs associated with cancer treat...
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Objectives: Studies on the impact of illness on work productivity are important to rationally allocate healthcare resources and to design programs to mitigate these effects. This investigation was conducted to develop and apply daily measures of illness episodes, and to collect subjective and objective data on work performance impacts. Medical bil...
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This study comprehensively assessed the work outcomes of employees with depression. We collected baseline and six-month follow-up survey data from 229 employees with depression and two employee comparison groups: a group of healthy patients for the control group (N=173) and a group with rheumatoid arthritis (N=87), a frequent source of work disabil...
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We sought to examine the impact of direct-to-consumer advertising (DTCA) and pharmaceutical promotion to physicians on the likelihood that (1) an individual diagnosed with depression received antidepressant medication and that (2) antidepressant medication was used for the appropriate duration. A quasiexperimental design was used to examine treatme...
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Although direct-to-consumer advertising (DTCA) has generated substantial controversy, little is known about its effects on consumer and physician behavior. In this article, the authors examine the impact of DTCA and physician detailing on the choice of antidepressant medication. The authors find that detailing has a much greater effect on medicatio...
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Health care expenditures have been increasing sharply in the last ten years, with spending on mental health disorders being particularly prominent. Over the same time period, a number of new antipsychotic medications have been added to the armamentarium for treatment of persons diagnosed with schizophrenia. Due in part to the sharply increased expe...
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Employers who are developing strategies to reduce health-related productivity loss may benefit from aiming their interventions at the employees who need them most. We determined whether depression's negative productivity impact varied with the type of work employees performed. Subjects (246 with depression and 143 controls) answered the Work Limita...