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Launch prices for new pharmaceuticals in the heavily regulated and subsidized Spanish market, 1995–2007

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  • Puig-Junoy, Jaume
  • López-Valcárcel, Beatriz González

Abstract

This paper provides empirical evidence on the explanatory factors affecting introductory prices of new pharmaceuticals in a heavily regulated and highly subsidized market. We collect a data set consisting of all new chemical entities launched in Spain between 1997 and 2005, and model launch prices following an extended version of previous economic models. We found that, unlike in the US and Sweden, therapeutically “innovative” products are not overpriced relative to “imitative” ones after having controlled for other factors. Price setting is mainly used as a mechanism to adjust for inflation independently of the degree of innovation. The drugs that enter through the centralized EMA approval procedure are overpriced, which may be a consequence of market globalization and international price setting.

Suggested Citation

  • Puig-Junoy, Jaume & López-Valcárcel, Beatriz González, 2014. "Launch prices for new pharmaceuticals in the heavily regulated and subsidized Spanish market, 1995–2007," Health Policy, Elsevier, vol. 116(2), pages 170-181.
    • Handle: RePEc:eee:hepoli:v:116:y:2014:i:2:p:170-181
    DOI: 10.1016/j.healthpol.2014.02.015
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    2. Campillo-Artero, Carlos & Garcia-Armesto, Sandra & Bernal-Delgado, Enrique, 2016. "The merry-go-round of approval, pricing and reimbursement of drugs against the Hepatitis C virus infection in Spain," Health Policy, Elsevier, vol. 120(9), pages 975-981.
    3. Paolo Pertile & Simona Gamba & Martin Forster, 2018. "Free-Riding in Pharmaceutical Price Regulation: Theory and Evidence," Discussion Papers 18/04, Department of Economics, University of York.
    4. Massimo Florio & Chiara Pancotti, 2022. "European pharmaceutical research and development. Could a public infrastructure overcome market failures?," Working Papers 202202, CSIL Centre for Industrial Studies.

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