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Drug Prices and Pressure Group Activities in the German Health Care Market: An Application of the Becker Model

Author

Listed:
  • Anne Maria Busch

    (Leuphana University Lueneburg, Germany)

Abstract

This article analyzes the shifts of power relation and influence between pharmaceutical industry (producers), pharmacies, and social health insurers (SHI) in Germany based on drug prices. Since the health care reform of 2004, these interest groups have negotiated fees and discounts among each other without any intervention from the government. These negotiations and resulting amendments to the original law express the shift of power of the involved groups, which can be explained with the Becker (1983) model. As a result, a trend becomes apparent, which shows a slight increase in political pressure on the part of SHI and a big decrease of political pressure on the part of pharmacies and producers. This reflects the cost control trend in combination with the empowerment incentives for SHI. The last years have shown increased competition between the interest groups, resulting in more balanced power relations. Nevertheless, the most powerful group is still the producer group and the influence of SHI is still very low.

Suggested Citation

  • Anne Maria Busch, 2015. "Drug Prices and Pressure Group Activities in the German Health Care Market: An Application of the Becker Model," Working Paper Series in Economics 338, University of Lüneburg, Institute of Economics.
    • Handle: RePEc:lue:wpaper:338
    as

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    References listed on IDEAS

    as
    1. van Winden, Frans, 1999. "On the Economic Theory of Interest Groups: Towards a Group Frame of Reference in Political Economics," Public Choice, Springer, vol. 100(1-2), pages 1-29, July.
    2. Vjollca Sadiraj & Jan Tuinstra & Frans Winden, 2005. "Interest group size dynamics and policymaking," Public Choice, Springer, vol. 125(3), pages 271-303, December.
    3. Zweifel, Peter & Crivelli, Luca, 1996. "Price Regulation of Drugs: Lessons from Germany," Journal of Regulatory Economics, Springer, vol. 10(3), pages 257-273, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    interest groups; political pressure; health care market; regulation;
    All these keywords.

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • I39 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Other
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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