Pricing behaviour of pharmacies after market deregulation for OTC drugs: The case of Germany
Objective To examine the price reactions of German pharmacies to changes made to OTC drug regulations in 2004. Prior to these changes, regulations guaranteed identical prices in all German pharmacies.Methods Two years after market deregulation, 256 pharmacies were surveyed to determine the retail prices of five selected OTC drugs. A probit regression model was used to identify factors that increased the likelihood of price changes. In addition, 409 pharmacy consumers were interviewed to gather information on their knowledge of the regulatory changes and to better explain consumer behaviour.Results Data was collected on a total of 1215 prices. Two years after deregulation, 23.1% of the participating pharmacies had modified the price of at least one of the five OTCs included in our study. However, in total, only 7.5% of the prices differed from their pre-deregulation level. The probit model showed that population density and the geographic concentration of pharmacies were significantly associated with price changes. Interestingly, the association with the geographic concentration of pharmacies was negative. The consumer survey revealed that 47.1% of those interviewed were aware of the deregulation.Conclusions Our findings indicate that, two years after deregulation, very few pharmacies had made use of individual pricing strategies; price competition between pharmacies in Germany is thus taking place only a very small scale.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- Anell, Anders, 2005. "Deregulating the pharmacy market: the case of Iceland and Norway," Health Policy, Elsevier, vol. 75(1), pages 9-17, December.
- Reich, Michael R., 1995. "The politics of health sector reform in developing countries: three cases of pharmaceutical policy," Health Policy, Elsevier, vol. 32(1-3), pages 47-77.
- Reinhard Busse & Tom Stargardt & Jonas Schreyögg, 2005. "Determining the “Health Benefit Basket” of the Statutory Health Insurance scheme in Germany," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 6(1), pages 30-36, November.
- Z. John Lu & William S. Comanor, 1998. "Strategic Pricing Of New Pharmaceuticals," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 108-118, February.
When requesting a correction, please mention this item's handle: RePEc:eee:hepoli:v:84:y:2007:i:1:p:30-38. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)or ()
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.