Price and welfare effects of a pharmaceutical substitution reform

David Granlund

Journal of Health Economics, 2010, vol. 29, issue 6, 856-865

Abstract: The price effects of the Swedish pharmaceutical substitution reform are analyzed using data for a panel of all pharmaceutical product sold in Sweden in 1997-2007. The price reduction due to the reform was estimated to average 10% and was found to be significantly larger for brand-name pharmaceuticals than for generics. The results also imply that the reform amplified the effect that generic entry has on brand-name prices by a factor of 10. Results of a demand estimation imply that the price reductions increased total pharmaceutical consumption by 8% and consumer welfare by SEK 2.7 billion annually.

Keywords: Drugs; Generic; competition; Equivalent; variation; Demand; estimation (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:29:y:2010:i:6:p:856-865

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