Regulation of pharmaceutical prices: Evidence from a reference price reform in Denmark
| Autor: | Ulrich Kaiser, Thomas Rønde, Susan J. Méndez, Hannes Ullrich |
|---|---|
| Přispěvatelé: | University of Zurich, Ullrich, Hannes |
| Rok vydání: | 2014 |
| Předmět: |
U.S. Producer Price Index
Denmark jel:C23 Choice Behavior reference pricing Pharmaceutical markets 10004 Department of Business Administration Health care Economics Cost Sharing 050207 economics health care economics and organizations 050208 finance I18 Public economics Health Policy 05 social sciences Reference price regulation Insurance Pharmaceutical Services 330 Economics Consumer welfare jel:I18 8. Economic growth Regulation Co-payments C23 Reference pricing Prescription Drugs Cost Control jel:D22 Pharmacy 0502 economics and business co-payments welfare effects regulation pharmaceutical markets reference pricing ddc:330 Drugs Generic Humans Revenue Economics Pharmaceutical Medical prescription Government pharmaceutical markets regulation co-payments reference pricing welfare effects business.industry Prescription Fees Public Health Environmental and Occupational Health 2739 Public Health Environmental and Occupational Health pharmaceutical markets welfare effects 2719 Health Policy co-payments Hydroxymethylglutaryl-CoA Reductase Inhibitors business D22 |
| Zdroj: | Journal of Health Economics |
| ISSN: | 0167-6296 |
| DOI: | 10.1016/j.jhealeco.2014.04.003 |
| Popis: | Reference price systems for prescription drugs constitute widely adopted cost containment tools. Under these regimes, patients co-pay a fraction of the difference between a drug's pharmacy retail price and a reference price that is set by the government. Reference prices are either externally (based on drug prices in other countries) or internally (based on domestic drug prices) determined. We study the effects of a change from external to internal reference pricing in Denmark in 2005. We find that the reform led to substantial reductions in retail prices, reference prices and patient co-payments as well as to sizable decreases in overall producer revenues and health care expenditures. The reform induced consumers to substitute away from branded drugs for which we estimate strong preferences. The increase in consumer welfare due to the reform therefore depends on whether or not we take perceived quality differences into account in its calculation. Reference prices constitute a main determinant of patient health care reimbursement in many countries. We study the effects of a change from an "external" (based on a basket of prices in other countries) to an "internal" (based on comparable domestic products) reference price system. We find that while our estimated consumer compensating variation is small, the reform led to substantial reductions in list and reference prices as well as co-payments, and to sizeable decreases in overall producer revenues, health care expenditures, and co-payments. These effects differ markedly between branded drugs, generics, and parallel imports with health care expenditures and producer revenues decreasing and co-payments increasing most for branded drugs. The reform also induced consumers to substitute from branded drugs – for which they have strong preferences – to generics and parallel imports. This substitution also explains the small increase in consumer welfare despite a substantial decrease in expenditures. |
| Databáze: | OpenAIRE |
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