Date of Award

Fall 2019

Degree Type

Restricted to Claremont Colleges Dissertation

Degree Name

Economics, PhD


School of Social Science, Politics, and Evaluation

Advisor/Supervisor/Committee Chair

John Rutledge

Dissertation or Thesis Committee Member

Tom Willett

Dissertation or Thesis Committee Member

Angela Vossmeyer

Dissertation or Thesis Committee Member

Clemens Kownatzki

Terms of Use & License Information

Terms of Use for work posted in Scholarship@Claremont.

Rights Information

© 2019 Shirin Mollah


financial economics, health economics, pharmaceutical economics

Subject Categories



This dissertation investigates the market response to three significant events relevant to the pharmaceutical drug pricing issue in the United States. We examine a few policies and solutions in e↵orts to assist with this issue. Using an event study methodology, we investigate the impact of the Generic Drug User Fee Act of 2012 (GDUFA) and Medicare Part D policies on the pharmaceutical industry’s stock returns. We hypothesize that the GDUFA will have a positive impact on generic firms and a negative impact on brand-name firms. We also analyze the exogenous shock of the announcement by Turing’s former CEO, Martin Shkreli, of the purchase of the drug Daraprim, and its subsequent price increase in the pharmaceutical industry. We hypothesize that the exogenous shock will have a negative impact on the pharmaceutical industry’s stock returns. We use the Center for Research in Security Prices (CRSP) dataset for all three events. In addition to this dataset, we use the Food and Drug Administration’s (FDA) Approved Drug Products with Therapeutic Equivalence Evaluations (commonly known as the Orange Book) dataset to di↵erentiate between generic and brand-name firms for the Generic Drug User Fee Act of 2012 event. In this dissertation, we use the ecient market hypothesis to examine the di↵erent market responses to each of the events. We find evidence for our hypotheses that the events impact the pharmaceutical industry. There are di↵erent elements of the events – expected vs. unexpected, good news, and bad news – that have been essential to the ecient market hypothesis and have provided further evidence to support our hypotheses. By using the ecient market hypothesis, the results provide insight into the market responses of di↵erent types of events with di↵erent elements. We investigated the policies and events in the short run to provide insight into future policy implications which would otherwise take several years to analyze.