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Drug launch timing and international reference pricing

Author

Listed:
  • Nicolas Houy

    (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - Université de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique)

  • Izabela Jelovac

    (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - Université de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper analyzes the timing decisions of pharmaceutical firms to launch a new drug in countries involved in international reference pricing. We show three important features of launch timing when all countries reference the prices in all other countries and in all previous periods of time. First, there is no withdrawal of drugs in any country and in any period of time. Second, there is no strict incentive to delay the launch of a drug in any country. Third, whenever the drug is sold in a country, it is also sold in all countries with larger willingness to pay. We then show that the three results do not hold when the countries only reference a subset of all countries. The first two results do not hold when the reference is on the last period prices only.
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Suggested Citation

  • Nicolas Houy & Izabela Jelovac, 2013. "Drug launch timing and international reference pricing," Post-Print halshs-00955848, HAL.
    • Handle: RePEc:hal:journl:halshs-00955848
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    Citations

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    Cited by:

    1. Anna-Maria Fontrier & Jennifer Gill & Panos Kanavos, 2019. "International impact of external reference pricing: should national policy-makers care?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(8), pages 1147-1164, November.
    2. Laura Birg, 2024. "The design of external reference pricing schemes and the choice of reference countries and pricing rules," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 57(4), pages 1182-1202, November.
    3. Foad Iravani & Hamed Mamani & Emisa Nategh, 2020. "External Reference Pricing and Parallel Imports of Pharmaceuticals: A Policy Comparison," Production and Operations Management, Production and Operations Management Society, vol. 29(12), pages 2716-2735, December.
    4. Fontrier, Anna-Maria & Gill, Jennifer & Kanavos, Panos, 2019. "International impact of external reference pricing: should national policy makers care?," LSE Research Online Documents on Economics 100929, London School of Economics and Political Science, LSE Library.
    5. Izabela Jelovac, 2014. "Drug approval decision times, international reference pricing and strategic launches of new drugs," Post-Print halshs-01138229, HAL.
    6. Nicolas Houy & Izabela Jelovac, 2019. "Comparing approval procedures for new drugs," The World Economy, Wiley Blackwell, vol. 42(5), pages 1598-1619, May.
    7. Jennifer Gill & Anna-Maria Fontrier & Dionysis Kyriopoulos & Panos Kanavos, 2019. "Variations in external reference pricing implementation: does it matter for public policy?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(9), pages 1375-1397, December.
    8. Toon van der Gronde & Carin A Uyl-de Groot & Toine Pieters, 2017. "Addressing the challenge of high-priced prescription drugs in the era of precision medicine: A systematic review of drug life cycles, therapeutic drug markets and regulatory frameworks," PLOS ONE, Public Library of Science, vol. 12(8), pages 1-34, August.

    More about this item

    Keywords

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    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics

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