Consumer Information and Pharmaceutical Prices: Theory and Evidence
AbstractIn this paper, the impact of increased information on brand name and generic pharmaceutical prices is analyzed both theoretically and empirically. The theoretical results show that an increase in information is likely to reduce the price of brand name pharmaceuticals, while the results regarding generics are less clear. In the empirical part of the paper, the introduction of the substitution reform in the Swedish pharmaceuticals market in October 2002 is used as a natural experiment regarding the effects of increased consumer information on pharmaceutical prices. The results clearly show that the reform has lowered the price of both brand name- and generic pharmaceuticals.
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Bibliographic InfoPaper provided by HUI Research in its series HUI Working Papers with number 8.
Length: 32 pages
Date of creation: 01 Apr 2007
Date of revision:
Publication status: Published as Granlund, David and Niklas Rudholm, 'Consumer Information and Pharmaceutical Prices: Theory and Evidence' in Oxford Bulletin of Economics and Statistics, 2011, pages 230-254.
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More information through EDIRC
Pharmaceutical industry; generic competition; generic drugs; brand name drugs;
Find related papers by JEL classification:
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
- L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-05-26 (All new papers)
- NEP-COM-2007-05-26 (Industrial Competition)
- NEP-HEA-2007-05-26 (Health Economics)
- NEP-MKT-2007-05-26 (Marketing)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Granlund, David, 2008. "Does physicians' compensation affect the probability of their vetoing generic substitution?," UmeÃ¥ Economic Studies 729, Umeå University, Department of Economics, revised 26 Mar 2008.
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