JELOVAC Izabela

This thesis examines the role of specialist physician opinions as they have implications for patient outcomes and the organization and sustainability of health care systems. The first project examines the opinions of infectious disease specialists in a French tertiary (inpatient) hospital. The second project examines complementarity or substitution regarding relationships between general practitioners and specialists. The third examines how patients reacted to the reform of the care pathway in France in terms of compliance, and a preliminary examination of the factors affecting this compliance. The second and third papers examine aspects related to geographic variation as well. In my fourth article, I present a study protocol written as a follow-up to the first article.

This thesis makes three major contributions. The first chapter, an article published in the Revue Française d'Économie n°2/vol XXXIV, proposes a review of the literature on the implications of the regulation of genetic predisposition tests on the health insurance market. We show that current forms of regulation perform a trade-off between maximizing social welfare ex ante and encouraging prevention. This trade-off is conditioned by the way in which the acquisition of information affects agents' prevention and disclosure behaviors, the discrimination of risks by insurers, and the nature of contracts. The second chapter theoretically studies the impact of reclassification on prevention, the decision to test, and social welfare in mandatory disclosure regulation. In particular, we show that as a function of the cost of the prevention effort the individual value of genetic information with reclassification can be higher than without reclassification. In addition, we show how temporal preferences affect the individual value of genetic information. According to our results, social welfare is strictly higher without reclassification than with reclassification. The last chapter studies and characterizes incentive contracts that can be implemented to develop personalized medicine with highly effective treatments, in a context of moral hazard on the firm's effort to improve the effectiveness of the drug. We consider a model in which the health authority has three options. It can apply the same treatment (standard or new treatment) to the whole population or implement personalized medicine, i.e. use genetic information to propose the most appropriate treatment for each patient. We first characterize the drug reimbursement contract of a company producing a new treatment with a companion genetic test when the company can undertake an effort to improve drug quality. Second, we determine the conditions under which personalized medicine should be implemented when this effort is observable and when it is not. Finally, we show how the unobservability of the effort affects the health authority's decision to implement personalized medicine with highly effective treatments.

We study the incentive properties of physician contracts in different contexts and using different methods. In Chapter 1, we propose a "principal-agent" model in which there is adverse selection on the altruism of agents, limited liability and a technology provided by the regulator that can improve the quality of physicians' effort. In such a context (characterizing the health sector with access to personalized medicine for instance), we show that optimal contracts imply higher wages for altruistic agents and better quality effort-enhancing technology for selfish agents. In Chapter 2, we propose an experiment in which physicians can access personalized medicine techniques for free or at a given cost. We evaluate for different payment systems, the likelihood that physicians will make the decision to pay for access to personalized medicine, and we also focus on how they use these technologies, depending on whether they are free or costly to access. We find that physicians tend to make better use of personalized medicine techniques when they acquired it at a cost. In Chapter 3, we investigate the incentive properties of pay-for-performance systems. Using the same experiment from Chapter 2, we find that pay-for-performance systems enhance physicians' focus on what is relevant to the patient, but are associated with an erosion of their intrinsic motivation.

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Pharmaceutical innovations result from the successful achievement of basic research, produced by an upstream lab, and applied research, produced by a downstream lab. We focus on the negotiation process to finance basic research by setting public and private grants and to agree on the final price of a new drug. We show that exclusive funding of basic research is desirable. To increase consumers' surplus and reduce negotiated prices for new drugs, basic and applied research should be integrated if the lab producing applied research has a relatively large bargaining power. When instead the health authority has the larger bargaining power, integration with the producer of basic research increases negotiated prices for new drugs and should be avoided, unless the gain in bargaining power after the integration is extremely high. Abstract. Pharmaceutical innovations result from the successful achievement of basic research, produced by an upstream lab, and applied research, produced by a downstream lab. We focus on the negotiation process to finance basic research by setting public and private grants and to agree on the final price of a new drug. We show that exclusive funding of basic research is desirable. To increase consumers' surplus and reduce negotiated prices for new drugs, basic and applied research should be integrated if the lab producing applied research has a relatively large bargaining power. When instead the health authority has the larger bargaining power, integration with the producer of basic research increases negotiated prices for new drugs and should be avoided, unless the gain in bargaining power after the integration is extremely high.

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We study optimal contracts in a regulator-agent setting with joint production, altruistic and selfish agents, and uneasy outcome measurement. Such a setting represents sectors of activities such as education and health care provision. The agents and the regulator jointly produce an outcome for which they all care to some extent that is varying from agent to agent. Some agents, the altruistic ones, care more than the regulator does while others, the selfish agents, care less. Moral hazard is present due to the agent's effort that is not contractible. Adverse selection is present too since the regulator cannot a priori distinguish between altruistic and selfish agents. Contracts consist of a simple transfer from the regulator to the agents together with the regulator's input in the joint production. We show that a screening contract is not optimal when we face both moral hazard and adverse selection.

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We study optimal contracts in a regulator-agent setting with joint production, altruistic and selfish agents, and uneasy outcome measurement. Such a setting represents sectors of activities such as education and health care provision. The agents and the regulator jointly produce an outcome for which they all care to some extent that is varying from agent to agent. Some agents, the altruistic ones, care more than the regulator does while others, the selfish agents, care less. Moral hazard is present due to the agent’s effort that is not contractible. Adverse selection is present too since the regulator cannot a priori distinguish between altruistic and selfish agents. Contracts consist of a simple transfer from the regulator to the agents together with the regulator’s input in the joint production. We show that a screening contract is not optimal when we face both moral hazard and adverse selection.

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Some countries allow physicians to balance bill patients, that is, to bill a fee above the one that is negotiated with, and reimbursed by the health authorities. Balance billing is known for restricting access to physicians’ services while supplemental insurance against balance billing amounts is supposed to alleviate the access problem. This paper analyzes in a theoretical setting the consequences of balance billing on the fees setting and on the inequality of access among the users of physicians’ services. It also shows that supplemental insurance against the expenses associated with balance billing, rather than alleviating the access problem, increases it.

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In theory, health care providers may adapt their professional behavior to the financial incentives driven by their remuneration. Our research question is whether the users of health care services anticipate such a behavior from their general practitioner (GP) and, if they do, what are the consequences of such an anticipation on their preferences regarding financial incentives. We propose a theoretical model to identify potential determinants of such preferences. We empirically test our theoretical predictions using the data from a survey that elicits individual preferences for either patients' or providers' hypothetical incentives in France. The empirical results confirm the theoretical ones by establishing that users tend to prefer to pay a copayment themselves when the amount of GPs' incentives is high, the one of the patients' copayment is low, they anticipate that their GP's medical decisions are affected by financial incentives and their wealth is high. Otherwise, they prefer their GP to face financial incentives.

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This paper analyzes how drug approval procedures influence the incentives of pharmaceutical firms to launch new drugs in the presence of international reference pricing. First, we show that the set of countries in which a firm commercializes a new drug is larger when countries do not approve this new drug simultaneously. We also show that a firm's best response to international reference pricing is to never launch a new drug sequentially as long as the difference in drug approval times between countries is small enough. Furthermore, we show that a firm's incentives to launch a new drug in one or another country are the same if the drug approval times are identical across countries or if the difference between approval times are small enough. However, we show that these incentives can change if the approval times differences across countries are large enough.

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Conditionality, and the extent to which it should be associated with development aid, has been a major concern within the donor community over the past decades. Practitioners argue in favour of associating budget support (BS) with some level of conditionality. A scientific analysis by Cordella and Dell’Ariccia confirms this view. The aim of this article is to qualify the circumstances under which conditionality is an effective complement to BS. To do this, we develop a theoretical model based on Cordella and Dell’Ariccia. We show that the optimal use of conditionality depends on the recipient’s developmental preferences, the productivity of the inputs and the level of aid compared with the recipient’s budget: when these parameters are relatively high, conditionality should be enforced. Otherwise, the optimal aid allocation is such that all the aid is given through unconditional BS. We conclude that conditionality does not always improve aid effectiveness.

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This paper analyzes how drug approval procedures influence the incentives of pharmaceutical firms to launch new drugs in the presence of international reference pricing. First, we show that the set of countries in which a firm commercializes a new drug is larger when countries do not approve this new drug simultaneously. We also show that a firm’s best response to international reference pricing is to never launch a new drug sequentially as long as the difference in drug approval times between countries is small enough. Furthermore, we show that a firm’s incentives to launch a new drug in one or another country are the same if the drug approval times are identical across countries or if the difference between approval times are small enough. However, we show that these incentives can change if the approval times differences across countries are large enough.

This paper analyzes the consequences of allowing gatekeeping general practitioners (GPs) to select their payment mechanism. We model GPs’ behavior under the most common payment schemes (capitation and fee for service) and when GPs can select one among them. Our analysis considers GP heterogeneity in terms of both ability and concern for their patients’ health. We show that when the costs of wasteful referrals to costly specialized care are relatively high, fee for service payments are optimal to maximize the expected patients’ health net of treatment costs. Conversely, when the losses associated with failed referrals of severely ill patients are relatively high, we show that either GPs’ self-selection of a payment form or capitation is optimal. Last, we extend our analysis to endogenous effort and to competition among GPs. In both cases, we show that self-selection is never optimal.

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This paper analyzes the timing decisions of pharmaceutical firms to launch a new drug in countries involved in international reference pricing. We show three important features of launch timing when all countries reference the prices in all other countries and in all previous periods of time. First, there is no withdrawal of drugs in any country and in any period of time. Second, there is no strict incentive to delay the launch of a drug in any country. Third, whenever the drug is sold in a country, it is also sold in all countries with larger willingness to pay. We then show that the three results do not hold when the countries only reference a subset of all countries. The first two results do not hold when the reference is on the last period prices only.

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This doctoral thesis focuses on understanding the competitive aspects of the incremental innovation market in France using an empirical approach. To this end, the analysis focuses on incremental innovation and the competitive dynamics of so-called "similar" drugs in France. The English-language literature uses the terms "me-too" or "follow-on" to define low-value-added pharmaceutical products with anatomical, therapeutic and chemical characteristics similar to those of previously marketed molecules. The first chapter focuses on the study of the market shares of follow-on drugs and the link with the strategic variable defined by the order of arrival on the market. In this chapter of the thesis, we verify that the first follow-on drugs of a therapeutic class have a competitive advantage in terms of their ability to capture and maintain market share over a long period. Furthermore, market share is positively correlated with the firm's ability to price above the first drug in the class. This strategic advantage of the first entrants is also intrinsically linked to the qualitative characteristics of the products since we have found that the market shares of the drugs are directly correlated with the level of innovation of the product. The second chapter of the thesis provides evidence on the price-competitive nature of the incremental pharmaceutical innovation market. Two dependent variables measuring price were considered: the price of the product calculated as the cost of the daily treatment and the price of the drug divided by the average price of similar drugs in the class. We verify that the latest entrants have a tendency to have a lower price than the first "follow-on" molecules. This implies a characterization of late entrants with less bargaining power with the regulator around the price, in particular due to a lower intrinsic innovative quality. The third chapter presents an empirical analysis of the confrontation between two emerging markets of major importance for the regulation of health systems: the generic market and the follow-on market. The analysis focuses on aspects of the intensity of competition in the market for similar patented drugs and its impact on the penetration of generic versions of the latter. The finding is that the intensity of similar drug competition is positively and significantly correlated with the introduction of generics. More follow-on products would therefore lead to an even greater decline in the prices of the generics of the last follow-on products in the therapeutic class. The essentially empirical approach of this doctoral thesis thus allows us to better understand the determinants and dynamics of this relatively emerging market, which is the subject of much debate within the scientific community. Finally, we conclude with a brief general conclusion based on the results of this research, which allows us to affirm that in a regulated market such as the one that prevails in France, the intensity of competition, generated in particular by the arrival on the market of "follow-on" drugs, can have positive consequences on the competitive aspects of the drug sector.

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Some countries allow physicians to balance bill patients, that is, to bill a fee above the one that is negotiated with, and reimbursed by the health authorities. Balance billing is known for restricting access to physicians' services while supplemental insurance against balance billing amounts is supposed to alleviate the access problem. This paper analyzes in a theoretical setting the consequences of balance billing on the fees setting and on the inequality of access among the users of physicians' services. It also shows that supplemental insurance against the expenses associated with balance billing, rather than alleviating the access problem, increases it.