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Parallel Imports and Mandatory Substitution Reform - A Kick or A Muff for Price Competition in Pharmaceuticals?

  • Granlund, David

    (The Swedish Retail Institute (HUI))

  • Köksal, Miyase Yesim

    (University of Gothenburg)

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    What has been the effect of competition from parallel imports on prices of locally-sourced onpatent drugs? Did the 2002 Swedish mandatory substitution reform increase this competition? To answer these questions, we carried out difference-in-differences estimation on monthly data for a panel of all on-patent prescription drugs sold in Sweden during the 40 months from January 2001 through April 2004. On average, facing competition from parallel imports caused a 15-17% fall in price. While the reform increased the effect of competition from parallel imports, it was only by 0.9%. The reform, however, did increase the effect of therapeutic competition by 1.6%.

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    Paper provided by HUI Research in its series HUI Working Papers with number 49.

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    Length: 32 pages
    Date of creation: 01 Apr 2011
    Date of revision:
    Handle: RePEc:hhs:huiwps:0049
    Contact details of provider: Postal: HUI Research, Regeringsgatan 60, 103 29 Stockholm, Sweden
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