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Evaluation of a Partial Ban of Rx-Rebates in Germany Using Difference-in-Differences

Author

Listed:
  • Maximilian M. Gail

    (Justus Liebig University Giessen, Chair for Industrial Organization, Regulation and Antitrust)

  • Georg Götz

    (Justus Liebig University Giessen, Chair for Industrial Organization, Regulation and Antitrust)

  • Daniel Herold

    (Justus Liebig University Giessen, Chair for Industrial Organization, Regulation and Antitrust)

  • Jan Schäfer

    (Justus Liebig University Giessen, Chair for Industrial Organization, Regulation and Antitrust)

Abstract

In December 2020, Germany implemented a policy restricting online pharmacies from offering rebates on prescription drugs to members of the statutory health insurance. This policy change created a natural experiment, allowing us to analyze its impact on the pharmaceutical market using Difference-in-Differences. Utilizing a novel dataset, we find that the ban led to a shift in consumer behavior, increasing offline pharmacy Rx sales by 1.36% to 1.65%. However, the policy’s effects were unevenly distributed across pharmacies. While all pharmacies experienced some benefit, the impact was disproportionately larger for higher-revenue pharmacies. For instance, pharmacies in the lowest revenue decile saw a modest annual profit increase of €1,360, whereas those in the highest decile gained more than five times that amount. Our findings indicate that the introduction of VOASG alone was insufficient to reverse the declining trend in pharmacy numbers in Germany. To strengthen the comprehensive supply of pharmaceuticals to the general population, additional reforms are necessary.

Suggested Citation

  • Maximilian M. Gail & Georg Götz & Daniel Herold & Jan Schäfer, 2025. "Evaluation of a Partial Ban of Rx-Rebates in Germany Using Difference-in-Differences," MAGKS Papers on Economics 202505, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    • Handle: RePEc:mar:magkse:202505
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    References listed on IDEAS

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    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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