Regulation of Pharmaceutical Prices: Evidence from a Reference Price Reform in Denmark

Ulrich Kaiser (), Susan Mendez and Thomas Rønde
Additional contact information
Thomas Rønde: Copenhagen Business School

No 2010-01, CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics

Abstract: On April 1, 2005, Denmark changed the way references prices, a main determinant of reimbursements for pharmaceutical purchases, are calculated. The previous reference prices, which were based on average EU prices, were substituted to minimum domestic prices. Novel to the literature, we estimate the joint effects of this reform on prices and quantities. Prices decreased more than 26 percent due to the reform, which reduced patient and government expenditures by 3.0 percent and 5.6 percent, respectively, and producer revenues by 5.0 percent. The prices of expensive products decreased more than their cheaper counterparts, resulting in large differences in patient benefits from the reform.

Keywords: pharmaceutical markets; regulation; co-payments; reference pricing; asymmetric welfare effects (search for similar items in EconPapers)
JEL-codes: C23 I18 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2010-08
New Economics Papers: this item is included in nep-com, nep-hea and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Regulation of pharmaceutical prices: Evidence from a reference price reform in Denmark (2014)
Working Paper: Regulation of Pharmaceutical Prices: Evidence from a Reference Price Reform in Denmark (2013)
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