Evaluation of the Pharmaceutical Industry Investment Program

Research Report

The research report, Evaluation of the Pharmaceutical Industry Investment Program, was released on 14 February 2003. Also see:


Cover, Copyright, Foreword, Contents, Terms of reference, Abbreviations, Glossary, Recommendations and findings

1   Introduction
1.1   Overview of the Pharmaceutical Industry
1.2   Key issues and methodology
1.3   Guide to the report
1.4   Participation

2   The Pharmaceutical Industry Investment Program
2.1   Objectives and guiding principles of the program
2.2   Entry to the PIIP
2.3   Eligible activity
2.4   Entitlements
2.5   Payments
2.6   Administration of the program
2.7   Use of the PIIP

3   Compensating for the Pharmaceutical Benefits Scheme
3.1   Introduction
3.2   The Pharmaceutical Benefits Scheme
3.3   Is there price suppression?
3.4   Does price suppression reduce drug profits?
3.5   Does price suppression reduce domestic activity?
3.6   Are any adverse activity effects inefficient?
3.7   Is there a rationale for assistance based on price suppression and PBS defects?

4   Other rationales
4.1   Spillover effects from pharmaceutical activity
4.2   Inter-governmental competition for investment
4.3   Information failure, ‘rules of thumb’ and firm location decisions
4.4   Geopolitical considerations
4.5   Conclusion

5   Effectiveness of the PIIP
5.1   General observations on inducement
5.2   Problems in measuring whether the PIIP has made a difference
5.3   Empirical estimates of the effects of the PIIP on value added
5.4   Research and development
5.5   Case studies
5.6   Comparisons with past results
5.7   Conclusions

6   Economic efficiency of the PIIP
6.1   The meaning of efficiency and net benefit
6.2   Net benefit methodology
6.3   Results
6.4   Conclusions regarding efficiency

7   A modified PIIP
7.1   Access to the R&D Tax Concession
7.2   Modifications to improve the effectiveness of the PIIP
7.3   Conclusion

8   Other measures
8.1   Clause (f) of the PBPA guidelines
8.2   PBS processes
8.3   Patent extension and the effect on generic pharmaceutical manufacturers

A   Meetings, submissions and survey respondents

B   Relationships between price and activity

C   Existing assistance measures for R&D

D   Explaining international price variations

E   Adjustment issues

F   A ring-fenced R&D Tax Concession versus a modified PIIP



Printed copies

This publication is only available online.

Have your say

We value your comments about this publication and encourage you to complete and submit the publications feedback form.