کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
969357 | 1479469 | 2011 | 15 صفحه PDF | دانلود رایگان |

We study the impact of regulation on competition between brand-names and generics and pharmaceutical expenditures using a unique policy experiment in Norway, where reference pricing (RP) replaced price cap regulation in 2003 for a sub-sample of off-patent products. First, we construct a vertical differentiation model to analyze the impact of regulation on prices and market shares of brand-names and generics. Then, we exploit a detailed panel data set at product level covering several off-patent molecules before and after the policy reform. Off-patent drugs not subject to RP serve as our control group. We find that RP significantly reduces both brand-name and generic prices, and results in significantly lower brand-name market shares. Finally, we show that RP has a strong negative effect on average molecule prices, suggesting significant cost-savings, and that patients' copayments decrease despite the extra surcharges under RP.
Research Highlights
► Reference pricing (RP) imposes a larger share of pharmaceutical expenditures on patients.
► Patients respond by demanding generics, reducing the brand-names’ market shares.
► Brand-name and generic producers respond to RP by reducing their prices.
► RP results in lower pharmaceutical expenditures for payer but also patients.
Journal: Journal of Public Economics - Volume 95, Issues 7–8, August 2011, Pages 624–638