Question 1

Drug-utilization reviews are used by third-party payers to rein in costs.

Accepted Answer

A) True 
 B)False  True

Question 2

Entrance of generic drugs into the market tends to _______ the price of the brand name drug since the remaining consumers of the brand name drug are typically _______ price-sensitive.

Accepted Answer

A)  increase; more 
B)  decrease; more 
C)  increase; less 
D)  not affect; equally 
E)  decrease; less 
A)  increase; more 
B)  decrease; more 
C)  increase; less 
D)  not affect; equally 
E)  decrease; less C

Question 3

While pharmaceutical manufacturers compete in a _______ concentrated industry than pharmacy benefit management companies, mergers between the two help to _______ costs.

Accepted Answer

A)  less; increase 
B)  less; decrease 
C)  more; increase 
D)  more; decrease 
E)  similarly; decrease 
A)  less; increase 
B)  less; decrease 
C)  more; increase 
D)  more; decrease 
E)  similarly; decrease D

Question 4

Which of the following accounts for the largest share of expenditures on prescription drugs?

Accepted Answer

A)  Private insurance 
B)  Medicare 
C)  Medicaid 
D)  Medigap 
E)  Out-of-pocket 
A)  Private insurance 
B)  Medicare 
C)  Medicaid 
D)  Medigap 
E)  Out-of-pocket

Question 5

_______ advertising is supported by evidence showing that _______ detailed advertising of older products tends to be targeted at younger physicians.

Accepted Answer

A)  Informative; more 
B)  Persuasive; less 
C)  Informative; less 
D)  Persuasive; more 
E)  both a and d 
A)  Informative; more 
B)  Persuasive; less 
C)  Informative; less 
D)  Persuasive; more 
E)  both a and d

Question 6

Unconstrained physicians are more inclined to purchase brand-name instead of generic products because they are unaffected financially by the drug choice.

Accepted Answer

A) True 
 B)False

Question 7

The FDA might delay the drug approval process to decrease the likelihood of a type 1 error.

Accepted Answer

A) True 
 B)False

Question 8

The FDA tends to focus more on reducing _______ errors since the victims are _______ identifiable than those from _______ errors.

Accepted Answer

A)  type 1; less; type 2 
B)  type 2; more; type 1 
C)  type 2; less; type 1 
D)  type 1; more; type 2 
E)  None of the above 
A)  type 1; less; type 2 
B)  type 2; more; type 1 
C)  type 2; less; type 1 
D)  type 1; more; type 2 
E)  None of the above

Question 9

High profits in the pharmaceutical industry may be a reflection of the greater risk incurred due to large research and development costs.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following would explain why large firms possess a greater incentive to engage in research and development of new drugs than small firms do?

Accepted Answer

A)  Resource capability 
B)  Risk absorption 
C)  Research economies 
D)  All of the above 
E)  None of the above 
A)  Resource capability 
B)  Risk absorption 
C)  Research economies 
D)  All of the above 
E)  None of the above

Question 11

Patents award pharmaceutical firms the sole right to produce a product for _______ years and _______ the financial incentive for firms to develop new drugs.

Accepted Answer

A)  25; increase 
B)  18; decrease 
C)  20; increase 
D)  15; increase 
E)  25; decrease 
A)  25; increase 
B)  18; decrease 
C)  20; increase 
D)  15; increase 
E)  25; decrease

Question 12

Which of the following methods has been used by third-party payers to control pharmaceutical costs?

Accepted Answer

A)  Formularies 
B)  Drug utilization review 
C)  Generic substitution 
D)  Both b and c 
E)  All of the above 
A)  Formularies 
B)  Drug utilization review 
C)  Generic substitution 
D)  Both b and c 
E)  All of the above

Question 13

What percentage of industry output is accounted for by the four largest drug manufacturers?

Accepted Answer

A)  35% 
B)  50% 
C)  40% 
D)  45% 
E)  60% 
A)  35% 
B)  50% 
C)  40% 
D)  45% 
E)  60%

Question 14

Which of the following serves as a barrier to entry in the pharmaceutical industry?

Accepted Answer

A)  Government patents 
B)  Certificates of need 
C)  Brand-loyalty advantage 
D)  Both a and c 
E)  All of the above 
A)  Government patents 
B)  Certificates of need 
C)  Brand-loyalty advantage 
D)  Both a and c 
E)  All of the above

Question 15

The U.S. government decreases competition within the pharmaceutical industry through the issuing of patents.

Accepted Answer

A) True 
 B)False

Drug-utilization reviews are used by third-party payers to rein in costs.

Entrance of generic drugs into the market tends to _ the price of the brand name drug since the remaining consumers of the brand name drug are typically _ price-sensitive.

While pharmaceutical manufacturers compete in a _ concentrated industry than pharmacy benefit management companies, mergers between the two help to _ costs.

Which of the following accounts for the largest share of expenditures on prescription drugs?

_ advertising is supported by evidence showing that _ detailed advertising of older products tends to be targeted at younger physicians.

Unconstrained physicians are more inclined to purchase brand-name instead of generic products because they are unaffected financially by the drug choice.

The FDA might delay the drug approval process to decrease the likelihood of a type 1 error.

The FDA tends to focus more on reducing ___ errors since the victims are _ identifiable than those from _____ errors.

High profits in the pharmaceutical industry may be a reflection of the greater risk incurred due to large research and development costs.

Which of the following would explain why large firms possess a greater incentive to engage in research and development of new drugs than small firms do?

Patents award pharmaceutical firms the sole right to produce a product for _ years and _ the financial incentive for firms to develop new drugs.

Which of the following methods has been used by third-party payers to control pharmaceutical costs?

What percentage of industry output is accounted for by the four largest drug manufacturers?

Which of the following serves as a barrier to entry in the pharmaceutical industry?

The U.S. government decreases competition within the pharmaceutical industry through the issuing of patents.

Introduction

Health and Medical Care: an Economic Perspective

Cost and Benefit Analysis

Health Care Systems and Institutions

The Demand for Medical Care

The Demand for Medical Insurance: Traditional and Managed Care Coverage

Medical Care Production and Costs

Structure, Conduct, Performance, and Market Analysis

Government, Health, and Medical Care

Government As Health Insurer

The Private Health Insurance Industry

The Physician Services Industry

The Hospital Services Industry

The Long-Term Care Industry

Health Insurance Reform

Filters

Exam 14: The Pharmaceutical Industry

Drug-utilization reviews are used by third-party payers to rein in costs.

Entrance of generic drugs into the market tends to _______ the price of the brand name drug since the remaining consumers of the brand name drug are typically _______ price-sensitive.

While pharmaceutical manufacturers compete in a _______ concentrated industry than pharmacy benefit management companies, mergers between the two help to _______ costs.

Which of the following accounts for the largest share of expenditures on prescription drugs?

_______ advertising is supported by evidence showing that _______ detailed advertising of older products tends to be targeted at younger physicians.

Unconstrained physicians are more inclined to purchase brand-name instead of generic products because they are unaffected financially by the drug choice.

The FDA might delay the drug approval process to decrease the likelihood of a type 1 error.

The FDA tends to focus more on reducing _______ errors since the victims are _______ identifiable than those from _______ errors.

High profits in the pharmaceutical industry may be a reflection of the greater risk incurred due to large research and development costs.

Which of the following would explain why large firms possess a greater incentive to engage in research and development of new drugs than small firms do?

Patents award pharmaceutical firms the sole right to produce a product for _______ years and _______ the financial incentive for firms to develop new drugs.

Which of the following methods has been used by third-party payers to control pharmaceutical costs?

What percentage of industry output is accounted for by the four largest drug manufacturers?

Which of the following serves as a barrier to entry in the pharmaceutical industry?

The U.S. government decreases competition within the pharmaceutical industry through the issuing of patents.

Introduction

Health and Medical Care: an Economic Perspective

Cost and Benefit Analysis

Health Care Systems and Institutions

The Demand for Medical Care

The Demand for Medical Insurance: Traditional and Managed Care Coverage

Medical Care Production and Costs

Structure, Conduct, Performance, and Market Analysis

Government, Health, and Medical Care

Government As Health Insurer

The Private Health Insurance Industry

The Physician Services Industry

The Hospital Services Industry

The Long-Term Care Industry

Health Insurance Reform

Filters

Entrance of generic drugs into the market tends to _ the price of the brand name drug since the remaining consumers of the brand name drug are typically _ price-sensitive.

While pharmaceutical manufacturers compete in a _ concentrated industry than pharmacy benefit management companies, mergers between the two help to _ costs.

_ advertising is supported by evidence showing that _ detailed advertising of older products tends to be targeted at younger physicians.

The FDA tends to focus more on reducing ___ errors since the victims are _ identifiable than those from _____ errors.

Patents award pharmaceutical firms the sole right to produce a product for _ years and _ the financial incentive for firms to develop new drugs.