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From symbiosis to independence: Investigating changes in the relationship between general practitioners’ presence and pharmacies’ market size in Slovakia

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  • Kališ, Richard

Abstract

Using the Slovak pharmacy retail market case, this study examines the evolving interdependency between general practitioners (GPs) and pharmacies. Traditionally, they have operated symbiotically, with pharmacy revenues heavily reliant on prescriptions. However, the development of the market structures of these providers after the liberalization of the pharmacy retail market in 2005 raises a question about the stability of this relationship. By analyzing entry thresholds as a measure of the market size required for pharmacies to cover their entry costs, the study reveals that the dependency of pharmacies on the presence of GPs has diminished over time. In the initial year following the liberalization, the presence of a GP decreased the market size sufficient to cover entry costs for the first pharmacy by about 83% compared to a market without a GP. However, in 2019, this effect decreased to approximately 65%. This could imply worsened coverage of pharmaceutical services in small and rural areas with GPs as the entry decision of pharmacies is less elastic towards their presence.

Suggested Citation

  • Kališ, Richard, 2024. "From symbiosis to independence: Investigating changes in the relationship between general practitioners’ presence and pharmacies’ market size in Slovakia," Health Policy, Elsevier, vol. 143(C).
    • Handle: RePEc:eee:hepoli:v:143:y:2024:i:c:s0168851024000502
    DOI: 10.1016/j.healthpol.2024.105040
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    More about this item

    Keywords

    Pharmacies; General practitioners; Complementarity; Entry; Market structure;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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