The Economics of the Public Option: Evidence from Local Pharmaceutical Marketst

• 成果类型: Article
• 署名作者: Atal, Juan pablo; Cuesta, Jost Ignacio; Gonzalez, Felipe; Otero, Cristobal
• 署名单位: University of Pennsylvania; Stanford University; National Bureau of Economic Research; University of London; Queen Mary University London
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20211547
• 发表日期: 2024
• 页码: 615-644
• 关键词: MEDICAID EXPANSION; COMPETITION; PRIVATE; QUALITY; POLICY; entry; politicians; schools

摘要

We study the effects of competition by state-owned firms, leveraging the decentralized entry of public pharmacies to local markets in Chile. Public pharmacies sell the same drugs at a third of private pharmacy prices, because of stronger upstream bargaining and market power in the private sector, but are of lower quality. Public pharmacies induced market segmentation and price increases in the private sector, which benefited the switchers to the public option but harmed the stayers. The countrywide entry of public pharmacies would reduce yearly consumer drug expenditure by 1.6 percent.