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Drug price differentials caused by de-listing and price cap policies

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  • Joan Ramon Borrell Arque

    (Universitat de Barcelona)

Abstract

This paper analyses the behaviour of pharmaceutical companies that face the threat of having their drugs excluded from reimbursement and the markets characterised also by price caps. We conclude that price elasticity of demand and cost differentials cause the price discounts which drug firms offer to health care organisations. Additionally, we conclude that price cap regulations affect the time path of prices, resulting in higher prices for new products and lower prices for old products.

Suggested Citation

  • Joan Ramon Borrell Arque, 2001. "Drug price differentials caused by de-listing and price cap policies," Working Papers in Economics 70, Universitat de Barcelona. Espai de Recerca en Economia.
    • Handle: RePEc:bar:bedcje:200170
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    References listed on IDEAS

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    1. Michael Spence, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 43(2), pages 217-235.
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    3. Kenneth Elzinga & David Mills, 1997. "The Distribution and Pricing of Prescription Drugs," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 4(3), pages 287-300.
    4. Zweifel, Peter & Crivelli, Luca, 1996. "Price Regulation of Drugs: Lessons from Germany," Journal of Regulatory Economics, Springer, vol. 10(3), pages 257-273, November.
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    6. F. M. Scherer, 1997. "How US Antitrust Can Go Astray: The Brand Name Prescription Drug Litigation," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 4(3), pages 239-256.
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    More about this item

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

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