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A model for the Dutch pharmaceutical market

Listed author(s):
  • Erik Canton

    (CPB-Netherlands Bureau for Economic Policy Analysis, The Hague, Netherlands)

  • Ed Westerhout

This paper develops a general-equilibrium model for the Dutch pharmaceutical market. The model derives the behaviour of patients, pharmacists, drug producers and parallel-importers from microeconomic principles and recognizes the interactions between the various actors. The latter is important since the general-equilibrium effects are sometimes at odds with intuition from a partial-equilibrium approach. A calibrated version of the model is used to evaluate the effects of various policy experiments on the bill for pharmaceutical care in the Netherlands. These experiments include an incentive policy to encourage cost-conscious drug distribution, an increase of copayments for pharmaceutical care, a reduction of trade barriers for parallel-importers, and market entry by producers of generic substitutes. Copyright © 1999 John Wiley & Sons, Ltd.

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Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 8 (1999)
Issue (Month): 5 ()
Pages: 391-402

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Handle: RePEc:wly:hlthec:v:8:y:1999:i:5:p:391-402
DOI: 10.1002/(SICI)1099-1050(199908)8:5<391::AID-HEC457>3.0.CO;2-7
Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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  1. Sara Ellison Fisher & Iain Cockburn & Zvi Griliches & Jerry Hausman, 1997. "Characteristics of Demand for Pharmaceutical Products: An Examination of Four Cephalosporins," RAND Journal of Economics, The RAND Corporation, vol. 28(3), pages 426-446, Autumn.
  2. John F. Helliwell, 1986. "Supply-Side Macro-economics," Canadian Journal of Economics, Canadian Economics Association, vol. 19(4), pages 597-625, November.
  3. Lee, ChoongSup, 1995. "Optimal medical treatment under asymmetric information," Journal of Health Economics, Elsevier, vol. 14(4), pages 419-441, October.
  4. N. Gregory Mankiw, 1987. "Consumer Spending and the After-Tax Real Interest Rate," NBER Chapters,in: The Effects of Taxation on Capital Accumulation, pages 53-68 National Bureau of Economic Research, Inc.
  5. Kees Folmer & Johnny Stevens & Frank Van Tulder & Ed Westerhout, 1997. "Towards an economic model of the Dutch health care sector," Health Economics, John Wiley & Sons, Ltd., vol. 6(4), pages 351-363.
  6. Fiona M. Scott Morton, 1997. "Entry Decisions in the Generic Pharmaceutical Industry," NBER Working Papers 6190, National Bureau of Economic Research, Inc.
  7. Blomqvist, Ake, 1991. "The doctor as double agent: Information asymmetry, health insurance, and medical care," Journal of Health Economics, Elsevier, vol. 10(4), pages 411-432.
  8. Schut, Frederick T. & Van Bergeijk, Peter A. G., 1986. "International price discrimination: The pharmaceutical industry," World Development, Elsevier, vol. 14(9), pages 1141-1150, September.
  9. Mooney, Gavin & Ryan, Mandy, 1993. "Agency in health care: Getting beyond first principles," Journal of Health Economics, Elsevier, vol. 12(2), pages 125-135, July.
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