Reference Pricing Versus Co-Payment in the Pharmaceutical Industry: Price, Quality and Market Coverage
Within a horizontally differentiation model, we analyse the relative effects of reference pricing and copayment reimbursement on firms pricing and quality strategies as well as on market coverage under different market structures: competitive market, local monopolies and exogenous full market coverage. Results allow us to shed some light on the welfare and total drug expenditure implications of different drug reimbursement policies.
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