Health Services Research

144 College Street
Toronto ON M5S 3M2

Area of Research

Paul Grootendorst examines economics issues in the pharmaceutical sector, with a particular focus on drug pricing, insurance and the provision of community pharmacy services. His work helps to inform public policy related to pricing, reimbursement and coverage.

Research Challenge

Economics is premised on the assumption that actors (individuals, businesses and organizations) make decisions that further their goals (e.g., businesses are assumed to maximize profits). Public policy can affect the net benefit of different decisions or courses of action to an actor; these effects can be intended or unintended.

Grootendorst’s research examines the impact of public policy and regulations on the behaviour of actors in the pharmaceutical sector and the attendant effects on pharmaceuticals spending, the quality of health care and other outcomes. For instance, lower reimbursement prices for generic drugs lowers drug plan spending, but can lead to shortages if lower prices make the production of some drugs unprofitable. Expanding the number of pharmacists licensed to practice in Ontario can increase accessibility to pharmacy services, but will also drive down pharmacist wages, which may lead to lower morale and the departure of the most capable pharmacists from the community sector.

Proposed Solution

Grootendorst uses survey and administrative data to examine the impact of policies on the behavior of actors in the pharmaceutical sector and the attendant effects on policy relevant outcomes.

A current focus is the economics of community pharmacies. This area has received little academic attention, so he is addressing the most basic questions: 1) How much is spent on pharmacy services in Canada? 2) Does the geographic distribution of pharmacies match the geographic distribution of health care needs? 3) The number of pharmacists licensed to practice in Canada and the share of pharmacists who trained outside of Canada have both grown in recent years. Where have all these new entrants to the profession ended up? What fraction are practicing in community pharmacy? What has been the impact on pharmacist wages?

Grootendorst also studies pharmacare policies, specifically looking for forms of pharmacare – such as coverage targeted on expensive drugs – that may be feasible in the event that provincial governments reject a fully comprehensive national plan.

Impact To Date

Grootendorst has published numerous papers and reports on drug pricing strategies and other pharmaceutical economics topics. His work has informed government generic drug reimbursement and procurement policy.  He is a recognized expert in the field, and he is often called upon for comment in media stories related to the topic.



Keywords: economics, price, pharmaceutical insurance, pricing, patient cost, patent terms, intellectual property costs, regulatory