Reference pricing, competition, and pharmaceutical expenditures: Theory and evidence from a natural experiment

• 成果类型: Article
• 署名作者: Brekke, Kurt R.; Holmas, Tor Helge; Rune Straume, Odd
• 署名单位: Norwegian School of Economics (NHH); Universidade do Minho; University of Bergen
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2010.11.015
• 发表日期: 2011
• 页码: 624-638
• 关键词: Pharmaceuticals; regulation; generic competition

摘要

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. (C) 2010 Elsevier B.V. All rights reserved.