UPTAKE AND DIFFUSION OF PHARMACEUTICAL INNOVATIONS IN HEALTH SYSTEMS - Innovation in the Biopharmaceutical Industry - page 85

UPTAKE AND DIFFUSION OF PHARMACEUTICAL
INNOVATIONS IN HEALTH SYSTEMS
RIFAT A. ATUN ∗ and IPEK GUROL-URGANCI †
Centre for Health Management
Tanaka Business School, Imperial College London
South Kensington Campus, London, SW7 2AZ, UK
∗ [e-mail]
† [e-mail]
DESMOND SHERIDAN
Department of National Heart and Lung Institute
Imperial College London and St Mary's Hospital, Norfolk Place
London, W2 1PG, UK
[e-mail]
Multiple interacting factors influence the uptake and diffusion of medicines which are
critical to improving health. However, there is a gap in our knowledge on how regulatory
policies and other national health systems attributes combine to impact on the utilisation of
innovative drugs, and health system goals and objectives.
Our review demonstrates that strong regulation adversely affects access to innovation,
reduces incentives for research-based firms to develop innovative products and leads to
short- and long-term welfare losses. Short-term efficiency gains from reducing pharmaceu-
tical expenditures may actually increase total healthcare costs, reduce user choice, and in
some cases, adversely affect health outcomes.
Decision makers need to adopt a holistic approach to policy making, and consider poten-
tial impact of regulations on the uptake and diffusion of innovations, innovation systems
and health system goals.
Keywords : Diffusion of innovation; pharmaceuticals; regulatory environment.
Introduction
Sustained improvements in health depend on uptake and diffusion of innovative
technologies (Cutler, and McClellan, 2001). The World Health Organization esti-
mates that half of all the gains in global health between 1952 and 1992 resulted
from access to better medicines, diagnostics and application of new knowledge.