The effect of Canadian imports on prescription drug prices in the U.S

Jonathan Hamilton

Regional Science and Urban Economics, 2012, vol. 42, issue 6, 1003-1008

Abstract: Reimportation of prescription drugs by American consumers from Canada has been a high-visibility policy issue. The large price discrepancies for some patented drugs arise from market pricing in the U.S. and a system of administered pricing in Canada. The model assumes that there are two classes of U.S. consumers: one group who cannot reimport drugs at any cost, and a second group with a distribution of reimportation costs. Under the assumption that the group who can reimport drugs has lower willingness to pay, reimportation serves as a mechanism for price discrimination in the U.S. market.

Keywords: Price discrimination; Parallel imports; Drug prices (search for similar items in EconPapers)
JEL-codes: D42 F12 I11 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:42:y:2012:i:6:p:1003-1008

DOI: 10.1016/j.regsciurbeco.2011.12.003

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