Cristin-resultat-ID: 1096514
Sist endret: 18. februar 2015 11:13
Resultat
Rapport
2014

Price Regulation and Parallel Imports of Pharmaceuticals

Bidragsytere:
  • Kurt Brekke
  • Tor Helge Holmås og
  • Odd Rune Straume

Utgiver/serie

Utgiver

Institutt for samfunnsøkonomi, Norges Handelshøyskole

Serie

NHH Dept. of Economics Discussion papers
ISSN 0804-6824

Om resultatet

Rapport
Publiseringsår: 2014
Hefte: 1
Antall sider: 38

Beskrivelse Beskrivelse

Tittel

Price Regulation and Parallel Imports of Pharmaceuticals

Sammendrag

This paper studies the effects of price regulation and parallel imports in the on-patent pharmaceutical market. First, we develop a theory model in which a pharmacy negotiates producer prices with a brand-name fi…rm and then sets retail prices. We show that the effects of price regulation crucially depend on whether the producer faces competition from parallel imports. While parallel imports improve the bargaining position of the pharmacy, price regulation counteracts this effect and may even be pro…fitable for the producer. Second, we use a unique dataset with information on sales and prices at both producer and retail level for 165 substances over four years (2004-7). Exploiting exogenous variation in the regulated price caps, we show that stricter price regulation reduces competition from parallel imports. While the effect is clearly negative on producer profi…ts for substances without parallel imports, the effect is not signifi…cant for substances with parallel imports. Finally, we show that stricter price regulation reduces total expenditures, but the effect is much stronger for substances with parallel import. Thus, our results suggest that price regulation may promote both static and dynamic efficiency in the presence of parallel imports.

Bidragsytere

Kurt Richard Brekke

Bidragsyterens navn vises på dette resultatet som Kurt Brekke
  • Tilknyttet:
    Forfatter
    ved Institutt for samfunnsøkonomi ved Norges Handelshøyskole

Tor Helge Holmås

  • Tilknyttet:
    Forfatter
    ved NORCE Samfunn ved NORCE Norwegian Research Centre AS

Odd Rune Straume

  • Tilknyttet:
    Forfatter
    ved Institutt for økonomi ved Universitetet i Bergen
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