The pharmaceutical distributors’ efficiency in Italy: an assessment of the impact of the 2010 reimbursable drug pricing reform

Giorgio Matteucci () and Daniele Santis ()
Additional contact information
Giorgio Matteucci: Sapienza University of Rome
Daniele Santis: Sapienza University of Rome

International Journal of Health Economics and Management, 2025, vol. 25, issue 1, No 1, 26 pages

Abstract: Abstract To assess the impact on pharmaceutical wholesalers’ financial viability and efficiency of the reform of the wholesalers’ and pharmacies’ margins on reimbursable drugs enacted in 2010 that halved the distributors’ margins. We perform a stochastic frontier analysis on a large original dataset comprising financial and production data from 2009, a year prior to the reform, to 2019 gathered in order to assess the impact of the reform on firms’ profitability and efficiency. The implemented policies have not been successful in fostering the development of a more efficient market that would ultimately benefit social welfare. Overall, our findings indicate that bigger firms lag behind their smaller counterparts in terms of efficiency, even in the long run. Our findings also suggest that an efficient pharmaceutical wholesaler is currently unable to generate normal profit from the distribution of reimbursable drugs. Compared to the other European countries, that seem to have a cost oriented approach, Italy provides one of the lowest margins to pharmaceutical wholesalers without properly considering the costs of the drugs’ distribution. A new regulatory approach to wholesaling margins is needed in order to improve efficiency and welfare.

Keywords: Pharmaceutical supply chain; Drug pricing; Price regulation; Public service obligations; Stochastic frontier analysis (search for similar items in EconPapers)
JEL-codes: I18 L51 L81 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10754-024-09387-y Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:ijhcfe:v:25:y:2025:i:1:d:10.1007_s10754-024-09387-y

Ordering information: This journal article can be ordered from
http://www.springer. ... th/journal/10754/PS2

DOI: 10.1007/s10754-024-09387-y

Access Statistics for this article

International Journal of Health Economics and Management is currently edited by Leemore Dafny, Robert Town, Mark Pauly, David Dranove and Pedro Pita Barros

More articles in International Journal of Health Economics and Management from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().