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Drug launch timing and international reference pricing

Listed author(s):
  • Izabela Jelovac

    (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)

  • Nicolas Houy

    (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)

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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Paper provided by HAL in its series Post-Print with number halshs-01080543.

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Date of creation: 04 Sep 2014
Publication status: Published in XXIXe Jornadas de Economia Industrial, 4-5 septembre 2014, Barcelone, Espagne, Sep 2014, Barcelone, Spain. 2014
Handle: RePEc:hal:journl:halshs-01080543
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01080543
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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  1. 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.
  2. Patricia M. Danzon & Andrew J. Epstein, 2008. "Effects of Regulation on Drug Launch and Pricing in Interdependent Markets," NBER Working Papers 14041, National Bureau of Economic Research, Inc.
  3. 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.
  4. Anke Richter, 2008. "Assessing the Impact of Global Price Interdependencies," PharmacoEconomics, Springer, vol. 26(8), pages 649-659, August.
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