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      Divergent spender: State-societal and meso-organisational mechanisms in the containment of public spending on pharmaceuticals in a liberal capitalist democracy.

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          Abstract

          For two decades, New Zealand has been placed consistently at the foot of OECD rankings for state expenditure on pharmaceuticals. In this article, we explore New Zealand's containment of pharmaceutical spending as a 'divergent' case of pharmaceutical policy in a liberal democracy. To elucidate the likely institutional mechanisms and interests behind this phenomenon, we conducted a case study of New Zealand's drug reimbursement policy. In doing so, we derived sensitising concepts from major accounts of pharmaceutical policymaking (Corporate Bias Theories and Reputational Theory) and theories of the western state (Historical Institutionalism and Corporate Domination Theory). Drawing on 28 expert interviews and documentary analysis, we identified three main mechanisms of spending containment. First, New Zealand's state bureaucracy use pricing strategies that rely on a spending containment strategy coordinated by bureaucratic managers. Second, these managers shape the policy preferences of expert committees involved in scientific drug assessment. Third, on a meta-level, conditions for spending containment are enabled by the judicial-legislative arena. As such, we find support for Historical Institutionalism and Reputational Theory and more limited support for Corporate Bias Theory and Corporate Domination Theory. Our explanation posits further conceptual linkages between the macro/societal and meso-organisational theoretical levels.

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          Author and article information

          Journal
          Sociol Health Illn
          Sociology of health & illness
          Wiley
          1467-9566
          0141-9889
          Jul 2021
          : 43
          : 6
          Affiliations
          [1 ] University of Durham, Durham, UK.
          [2 ] University of Bath, Bath, UK.
          Article
          10.1111/1467-9566.13343
          34263470
          4150b987-6efb-4eb9-a2f9-a061c8d95e9d
          History

          bureaucracy,New Zealand,state theory,reputational theory,pharmaceutical expenditure,neo-liberal corporate bias

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