IDEAS home Printed from https://ideas.repec.org/p/hal/journl/halshs-00955848.html
   My bibliography  Save this paper

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 - 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 - 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.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

(This abstract was borrowed from another version of this item.)

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
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Nebibe Varol & Joan Costa-Font & Alistair McGuire, 2012. "Does Adoption of Pharmaceutical Innovation Respond to Changes in the Regulatory Environment?," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 34(3), pages 531-553.
    2. Jean O. Lanjouw, 2005. "Patents, Price Controls and Access to New Drugs: How Policy Affects Global Market Entry," Working Papers 61, Center for Global Development.
    3. Nebibe Varol & Joan Costa-Font & Alistair McGuire, 2012. "Does Adoption of Pharmaceutical Innovation Respond to Changes in the Regulatory Environment?," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 34(3), pages 531-553.
    4. Dziubiński, Marcin & Goyal, Sanjeev, 2013. "Network design and defence," Games and Economic Behavior, Elsevier, vol. 79(C), pages 30-43.
    5. Patricia M. Danzon & Andrew J. Epstein, 2012. "Effects of Regulation on Drug Launch and Pricing in Interdependent Markets," Advances in Health Economics and Health Services Research, in: The Economics of Medical Technology, pages 35-71, Emerald Group Publishing Limited.
    6. Jerry A. Hausman & Jeffrey K. MacKie-Mason, 1988. "Price Discrimination and Patent Policy," RAND Journal of Economics, The RAND Corporation, vol. 19(2), pages 253-265, Summer.
    7. Christian Ghiglino & Sanjeev Goyal, 2010. "Keeping Up with the Neighbors: Social Interaction in a Market Economy," Journal of the European Economic Association, MIT Press, vol. 8(1), pages 90-119, March.
    8. Margaret K. Kyle, 2007. "Pharmaceutical Price Controls and Entry Strategies," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 88-99, February.
    9. Anke Richter, 2008. "Assessing the Impact of Global Price Interdependencies," PharmacoEconomics, Springer, vol. 26(8), pages 649-659, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nicolas Houy & Izabela Jelovac, 2014. "Drug approval decision times, international reference pricing and strategic launches of new drugs," Working Papers halshs-01072741, HAL.
    2. 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.
    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. Nicolas Houy & Izabela Jelovac, 2019. "Comparing approval procedures for new drugs," The World Economy, Wiley Blackwell, vol. 42(5), pages 1598-1619, May.
    6. 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.
    7. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nicolas Houy & Izabela Jelovac, 2014. "Drug approval decision times, international reference pricing and strategic launches of new drugs," Working Papers halshs-01072741, HAL.
    2. Watal, Jayashree & Dai, Rong, 2019. "Product patents and access to innovative medicines in a post-trips-era," WTO Staff Working Papers ERSD-2019-05, World Trade Organization (WTO), Economic Research and Statistics Division.
    3. Patricia M. Danzon & Eric L. Keuffel, 2014. "Regulation of the Pharmaceutical-Biotechnology Industry," NBER Chapters, in: Economic Regulation and Its Reform: What Have We Learned?, pages 407-484, National Bureau of Economic Research, Inc.
    4. Eric W. Bond & Kamal Saggi, 2017. "Bargaining over Entry with a Compulsory License Deadline: Price Spillovers and Surplus Expansion," American Economic Journal: Microeconomics, American Economic Association, vol. 9(1), pages 31-62, February.
    5. Abdulkadir Civan & Michael Maloney, 2017. "Launch Decisions of Pharmaceutical Companies," Journal of Economics and Financial Analysis, Tripal Publishing House, vol. 1(1), pages 35-58.
    6. Margaret Kyle & Yi Qian, 2014. "Intellectual Property Rights and Access to Innovation: Evidence from TRIPS," NBER Working Papers 20799, National Bureau of Economic Research, Inc.
    7. Dai, Rong & Watal, Jayashree, 2021. "Product patents and access to innovative medicines," Social Science & Medicine, Elsevier, vol. 291(C).
    8. Nicolas Houy & Izabela Jelovac, 2019. "Comparing approval procedures for new drugs," The World Economy, Wiley Blackwell, vol. 42(5), pages 1598-1619, May.
    9. Fabio Pammolli & Armando Rungi, 2016. "Access to Medicines and European Market Integration," Working Papers 01/2016, IMT School for Advanced Studies Lucca, revised Jan 2016.
    10. Bond, Eric W. & Saggi, Kamal, 2014. "Compulsory licensing, price controls, and access to patented foreign products," Journal of Development Economics, Elsevier, vol. 109(C), pages 217-228.
    11. Nebibe Varol & Joan Costa-i-Font & Alistair McGuire, 2011. "Explaining Early Adoption on New Medicines: Regulation, Innovation and Scale," CESifo Working Paper Series 3459, CESifo.
    12. Koenig, Pamina & MacGarvie, Megan, 2011. "Regulatory policy and the location of bio-pharmaceutical foreign direct investment in Europe," Journal of Health Economics, Elsevier, vol. 30(5), pages 950-965.
    13. Birg, Laura, 2016. "External reference pricing and the choice of country baskets and pricing rules," University of Göttingen Working Papers in Economics 279, University of Goettingen, Department of Economics.
    14. Santanu Roy & Kamal Saggi, 2023. "Equilibrium parallel import policies and international market structure," World Scientific Book Chapters, in: Kamal Saggi (ed.), Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy, chapter 15, pages 349-363, World Scientific Publishing Co. Pte. Ltd..
    15. Verniers, Isabel & Stremersch, Stefan & Croux, Christophe, 2011. "The global entry of new pharmaceuticals: A joint investigation of launch window and price," International Journal of Research in Marketing, Elsevier, vol. 28(4), pages 295-308.
    16. Antonio Cabrales & Sergi Jiménez‐Martín, 2013. "The Determinants Of Pricing In Pharmaceuticals: Are Us Prices Really So High?," Health Economics, John Wiley & Sons, Ltd., vol. 22(11), pages 1377-1397, November.
    17. Jobjörnsson, Sebastian & Forster, Martin & Pertile, Paolo & Burman, Carl-Fredrik, 2016. "Late-stage pharmaceutical R&D and pricing policies under two-stage regulation," Journal of Health Economics, Elsevier, vol. 50(C), pages 298-311.
    18. Patricia M. Danzon & Andrew W. Mulcahy & Adrian K. Towse, 2015. "Pharmaceutical Pricing in Emerging Markets: Effects of Income, Competition, and Procurement," Health Economics, John Wiley & Sons, Ltd., vol. 24(2), pages 238-252, February.
    19. Volman, Lucas, 2018. "The TRIPS Article 31 Tug of War Developing Country Compulsory Licensing of Pharmaceutical Patents and Developed Country Retaliation," LawArXiv 6cxaj, Center for Open Science.
    20. Stremersch, S. & Lemmens, A., 2008. "Sales Growth of New Pharmaceuticals Across the Globe: The Role of Regulatory Regimes," ERIM Report Series Research in Management ERS-2008-026-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.

    More about this item

    Keywords

    Drug launch timing; international reference pricing;

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:halshs-00955848. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.