Placement: Stanford University
Mentor: Kevin Schulman, M.D., M.B.A., Professor of Medicine, Associate Chair of Business Development and Strategy, Department of Medicine; Director of Industry Partnerships and Education, Clinical Excellence Research Center (CERC), Stanford University School of Medicine
Project: Examining the Role of Supply-Side Moral Hazard on Pharmaceutical Pricing
Guillaume Dedet, MBBS, M.D., M.A., M.Sc., is a 2022–23 French Harkness Fellow in Health Care Policy and Practice. He currently serves as senior health economist at the Organisation for Economic Co-operation and Development (OECD) Health Division, where he has been leading a project on inequalities in cancer care and prevention in the European Union (EU), as well as OECD/EU’s regular cycles of comparative analysis of health systems and the health of populations across Europe. Dedet is a lecturer at SciencesPo Paris and is the current secretary of the French Public Health Association (SFSP). Prior to joining the OECD, he worked as medical adviser in the Health Systems Financing Department at the French Ministry of Health, and as a technical officer at the World Health Organization Regional Office for Europe, Division of Health Systems and Public Health. Dedet holds an MBBS from the University of Montpellier, an M.D. in public health from the Greater Paris Academic Hospital, and three additional postgraduate degrees: an M.Sc. in statistics from University Paris-Sud, an M.Sc. in health policy planning and financing from the London School of Economics and Political Science, and an M.A. in global diplomacy from the SOAS University of London.
Project Overview: Moral hazard can be summarized by the idea that being insured changes incentives for beneficiaries, which causes them to change their behavior in ways that increase costs to the insurer. Most discussions on the role of moral hazard in health care have been focusing on the demand-side aspects of the question: by reducing the price that patients have to pay for health care, health insurance causes them to use more care. However, much less attention has been put on the other side of the coin: the responses of health care providers to a market in which most patients have health insurance. This insurance coverage loosens the constraints that the patient demand curve would otherwise impose on the ability of providers to raise their prices or to steer patients to expensive types of care. This phenomenon can be defined as supply-side moral hazard.
Supply-side moral hazard affects the general provision of services and technologies but may also have an important impact on the price of pharmaceutical products, with effects in the prices of products in the marketplace, and the portfolio of drug products available on the market. This project aims to describe in detail the theoretical concepts and assumptions explaining the role of supply-side moral hazard on pharmaceutical pricing in the U.S., specifically when it comes to product prices and industrial strategy choices.