The Response of Pharmaceutical Manufacturers to the Provisions of the ACA

Abstract

The provisions of the Patient Protection and Affordable Care Act of 2010 (the ACA) engendered a number of effects on pharmaceutical manufacturers, including the annual fee, mandated Medicaid drugs rebates, and Medicare prescription drug coverage “donut hole” relief. The authors conduct theoretical and empirical analyses to assess the consequences of the provisions. Both theoretical and empirical analyses show that the provisions have positive correlations with increased prices for branded prescription drugs. These findings reveal that pharmaceutical manufacturers shift drug costs to patients.

Keywords

• pharmaceutical manufacturers
• affordable care act
• drug costs
• health care
• donut hole