Optimal price regulations in international pharmaceutical markets with generic competition
| Autor: | Kamal Saggi, Difei Geng |
|---|---|
| Rok vydání: | 2020 |
| Předmět: |
Drug Industry
media_common.quotation_subject Control (management) Drug Costs Competition (economics) 03 medical and health sciences Spillover effect 0502 economics and business Drugs Generic Humans 050207 economics Function (engineering) Industrial organization media_common Economic Competition 030503 health policy & services Health Policy 05 social sciences Public Health Environmental and Occupational Health Economic surplus Product (business) Policy Incentive Costs and Cost Analysis Business 0305 other medical science Welfare Social Welfare |
| Zdroj: | Journal of Health Economics. 71:102315 |
| ISSN: | 0167-6296 |
| DOI: | 10.1016/j.jhealeco.2020.102315 |
| Popis: | In a two-country (home and foreign) model in which the home producer of a branded pharmaceutical product faces generic competition in each market, we analyze home's optimal policy choices regarding two major types of price regulations: external reference pricing (ERP) and direct price controls. Home's nationally optimal ERP policy lowers domestic price while maintaining the firm's export incentive. This ERP policy results in a negative international price spillover that the foreign country can (partly) offset via a local price control. Generic competition in either market reduces home's welfare gain from instituting an ERP policy. Weaker competition abroad or a greater weight on firm profits relative to consumer surplus in home's welfare function makes it more likely that home prefers an ERP policy to a price control. While international integration of national generic markets can improve welfare, such is not the case if it causes home to relax its ERP policy. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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