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External referencing and pharmaceutical price negotiation

Begoña Garcia Mariñoso (), Izabela Jelovac and Pau Olivella
Additional contact information
Begoña Garcia Mariñoso: Comisión del Mercado de las Telecomunicaciones

No 815, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

Abstract: External referencing (ER) imposes a price cap for pharmaceuticals based on prices of identical products in foreign countries. Suppose a foreign country (F) negotiates prices with a pharmaceutical firm while a home country (H) can either negotiate independently or implement ER based on the foreign price. We show that country H always prefers ER if (i) it can condition ER on the drug being subsidized in the foreign country and (ii) copayments are higher in H than in F. H’s preference is reinforced when the difference between country copayments is large and/or H’s population is small. External referencing by H always harms F if (ii) holds, but less so if (i) holds.

JEL-codes: I18 L65 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (1)

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ftp://ftp.gate.cnrs.fr/RePEc/2008/0815.pdf (application/pdf)

Related works:
Journal Article: External referencing and pharmaceutical price negotiation (2011) Downloads
Working Paper: External referencing and pharmaceutical price negotiation (2011) Downloads
Working Paper: External referencing and pharmaceutical price negotiation (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:gat:wpaper:0815

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