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Regulatory Economics

Meaning

Regulatory economics is an applied field of economics that studies the use of regulation to address market failures, focusing specifically on the costs, benefits, and overall efficiency of governmental intervention in the market. In the hormonal health and wellness space, this discipline analyzes the economic impact of regulations imposed by agencies like the FDA on drug development, pricing, and patient access to hormonal therapies and supplements. Understanding regulatory economics is crucial for pharmaceutical companies and policymakers as it quantifies the trade-offs between public safety and the financial incentives necessary to drive innovation. It provides a framework for evaluating the optimal level of regulatory stringency.