Date of Award

1-1-2017

Document Type

Thesis

Degree Name

M.A.

Department

Economics

First Advisor

Markus P. A. Schneider, Ph.D.

Second Advisor

Yavuz Yaşar, Ph.D.

Keywords

Big Pharma, Cannabinoids, Cannabis, Marijuana, Pharmaceuticals, Pharmacoeconomics

Abstract

Normative studies misunderstand a crucial aspect of cannabis legalization: they have not critically analyzed how the pharmaceutical industry might react when synthetic cannabinoid compounds could be incorporated into new products. I argue that when marijuana is federally legal, there will be two independent market developments in: i) the cannabis market, which includes botanic cannabis and herbal supplements sold in retail nutrition stores; and ii) the FDA-approved ethical drug market. How does the drug industry's monopolistic pricing structure lend itself to strategic pricing for these new synthetic cannabinoids? How much competition can we expect between dispensaries and nutrition shops selling herbal supplements? This work seeks to answer these questions by reviewing the literature on pricing and marketing strategies. I find that supplements' pricing strategies are based on production costs and retail shops' degree of market power. Prices for over-the-counter herbal supplements will follow a medium-low price to low price skimming trajectory. From a policy perspective, health insurers may cover these drugs in future drug plans. Synthetic cannabinoids may also be a breakthrough in the battling the opioid epidemic.

Copyright Statement / License for Reuse

Creative Commons Attribution 4.0 License
This work is licensed under a Creative Commons Attribution 4.0 License.

Provenance

Received from ProQuest

Rights holder

Ryan T. Freer

File size

77 p.

File format

application/pdf

Language

en

Discipline

Economics

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