IDEAS home Printed from https://ideas.repec.org/p/hal/journl/halshs-00955856.html

External referencing and pharmaceutical price negotiation

Author

Listed:
  • Begoña Garcia Mariñoso

    (CMT - Comisión del Mercado de las Telecomunicaciones - Comisión del Mercado de las Telecomunicaciones)

  • 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)

  • Pau Olivella

    (CODE - Center for the study of the Organizations and Decisions in Economics - UAB - Universitat Autònoma de Barcelona = Autonomous University of Barcelona = Universidad Autónoma de Barcelona)

Abstract

External referencing (ER) imposes a price cap for pharmaceuticals based on prices of identical products in foreign countries. Suppose a foreign country (F) negotiates prices with a pharmaceutical firm while a home country (H) can either negotiate independently or implement ER based on the foreign price. We show that country H always prefers ER if (i) it can condition ER on the drug being subsidized in the foreign country and (ii) copayments are higher in H than in F. H's preference isreinforced when the difference between country copayments is large and/or H's population is small. External referencing by H always harms F if (ii) holds, but less so if (i) holds.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Begoña Garcia Mariñoso & Izabela Jelovac & Pau Olivella, 2010. "External referencing and pharmaceutical price negotiation," Post-Print halshs-00955856, HAL.
    • Handle: RePEc:hal:journl:halshs-00955856
    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
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

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


    Cited by:

    1. Javad Moradpour & Aidan Hollis, 2021. "The economic theory of cost‐effectiveness thresholds in health: Domestic and international implications," Health Economics, John Wiley & Sons, Ltd., vol. 30(5), pages 1139-1151, May.
    2. Agnieszka Rusinowska & Ahmet Ozkardas, 2015. "On equilibrium payoffs in wage bargaining with discount rates varying in time," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(2), pages 181-199, October.
    3. 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.
    4. Philipp Ackermann, 2010. "External Price Benchmarking vs. Price Negotiation for Pharmaceuticals," Diskussionsschriften dp1004, Universitaet Bern, Departement Volkswirtschaft.
    5. Izabela Jelovac, 2015. "On the relationship between the negotiated prices of pharmaceuticals and the patients' co-payment," Economics Bulletin, AccessEcon, vol. 35(1), pages 481-493.
    6. Ahmet Ozkardas & Agnieszka Rusinowska, 2013. "An application of wage bargaining to price negotiation with discount factors varying in time," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00881151, HAL.
    7. Kanavos, Panos, 2019. "Does external reference pricing deliver what it promises? Evidence on its impact at national level," LSE Research Online Documents on Economics 101522, London School of Economics and Political Science, LSE Library.
    8. Gamba, S.; & Pertile, P.; & Righetti, G.;, 2022. "Spillovers of Pharmaceutical Price Regulations: evidence from the AMNOG Reform in Germany," Health, Econometrics and Data Group (HEDG) Working Papers 22/20, HEDG, c/o Department of Economics, University of York.
    9. Charitini Stavropoulou & Tommaso Valletti, 2015. "Compulsory licensing and access to drugs," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(1), pages 83-94, January.
    10. Puig-Junoy, Jaume & López-Valcárcel, Beatriz González, 2014. "Launch prices for new pharmaceuticals in the heavily regulated and subsidized Spanish market, 1995–2007," Health Policy, Elsevier, vol. 116(2), pages 170-181.
    11. Klibanoff Peter & Kundu Tapas, 2010. "Monopoly Pricing under a Medicaid-Style Most-Favored-Customer Clause and Its Welfare Implication," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-43, August.
    12. Grepperud, Sverre & Pedersen, Pål Andreas, 2020. "Positioning and negotiations: The case of pharmaceutical pricing," European Journal of Political Economy, Elsevier, vol. 62(C).
    13. Panos Kanavos & Anna-Maria Fontrier & Jennifer Gill & Olina Efthymiadou, 2020. "Does external reference pricing deliver what it promises? Evidence on its impact at national level," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(1), pages 129-151, February.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

    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-00955856. 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.

    We have no bibliographic references for this item. You can help adding them by using 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.