Estimating Demand Function for Antihypertensives in Iran

Roodi, Farshad | 2015

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 47727 (44)
  4. University: Sharif University of Technology
  5. Department: Management and Economics
  6. Advisor(s): Fatemi Ardestati, Farshad
  7. Abstract:
  8. The essential need for allocation of appropriate resources to the wellbeing and medication plans in a society can be understood from the fundamental impact of health on the performance of the labor force of the society, which can lead to significant increase in the economic growth rate. The high costs associated with research and development make pharmaceutical industry owners to be very vigilant about their investment on new drugs and expected sales. The purpose of this study is to evaluate current Iranian market for a part of Antihypertensive drugs and to estimate the demand for this group of drugs. The method used to obtain the estimation involved multi-stage budgeting, which benefits from compliance with the multi-stage process of drug demands in the market. In particular, the annual sale data that has been documented in pharmaceutical statistics was used to obtain the estimation. The results of this study on nine drugs indicate that all the drugs have a positive income elasticity of demand lower than one. Consistent with the findings of previous studies, this result endorses the hypothesis of "Drug is a necessary good". However, with regard to price elasticity of demand, the hypothesis of applicability of demand law and inelasticity of demand to products of this industry was rejected in a few cases. The findings of this study may help policymakers improve current status of the market in pharmaceutical industry
  9. Keywords:
  10. Demand Function ; Pharmacy ; Price Elasticity ; Demand Price Elasticity ; Income Elasticity ; Multi-Stage Budgeting

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