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Reference Pricing Versus Co-Payment in the Pharmaceutical Industry: Price, Quality and Market Coverage

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  • Marisa Miraldo

    (Centre for Health Economics, University of York)

Abstract

Within a horizontally differentiation model, we analyse the relative effects of reference pricing and copayment reimbursement on firms pricing and quality strategies as well as on market coverage under different market structures: competitive market, local monopolies and exogenous full market coverage. Results allow us to shed some light on the welfare and total drug expenditure implications of different drug reimbursement policies.

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File URL: http://www.york.ac.uk/media/che/documents/papers/researchpapers/rp25_reference_pricing_versus_co-payment_in_the_pharmaceutical_industry_price_quality_and_market_coverage.pdf
File Function: First version, 2007
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Bibliographic Info

Paper provided by Centre for Health Economics, University of York in its series Working Papers with number 025cherp.

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Length: 43 pages
Date of creation: Apr 2007
Date of revision:
Handle: RePEc:chy:respap:25cherp

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Related research

Keywords: Reference Pricing; Co-payment; Product Differentiation;

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  1. d'ASPREMONT, Claude & GABSZEWICZ, Jean J. & THISSE, Jacques-François, . "On Hotelling's "Stability in competition"," CORE Discussion Papers RP -385, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Kurt R. Brekke & Robert Nuscheler & Odd Rune Straume, 2006. "Quality and Location Choices under Price Regulation," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(1), pages 207-227, 03.
  3. Economides, Nicholas, 1984. "The principle of minimum differentiation revisited," European Economic Review, Elsevier, vol. 24(3), pages 345-368, April.
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Cited by:
  1. Vincenzo Atella & Jay Bhattacharya & Lorenzo Carbonari, 2008. "Pharmaceutical industry, drug quality and regulation. Evidence from US and Italy," CEIS Research Paper 138, Tor Vergata University, CEIS, revised 16 Dec 2008.
  2. Miraldo, Marisa, 2009. "Reference pricing and firms' pricing strategies," Journal of Health Economics, Elsevier, vol. 28(1), pages 176-197, January.

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