EconPapers    
Economics at your fingertips  
 

Price regulation and generic competition in the pharmaceutical market

Dag Morten Dalen (), Tonje Habeth and Steinar Strøm
Additional contact information
Dag Morten Dalen: Handelshøyskolen BI, Postal: N-0442 Oslo, Norway
Tonje Habeth: Handelshøyskolen BI, Postal: N-0442 Oslo, Norway

No 2006:1, HERO Online Working Paper Series from University of Oslo, Health Economics Research Programme

Abstract: In March 2003 the Norwegian government implemented yardstick based price regulation schemes on a selection of drugs experiencing generic competition. The retail price cap, termed “index price”, on a drug (chemical substance) was set equal to the average of the three lowest producer prices on that drug, plus a fixed wholesale and retail margin. This is supposed to lower barriers of entry for generic drugs and to trigger price competition. Using monthly data over the period 1998-2004 for the 6 drugs (chemical entities) included in the index price system, we estimate a structural model enabling us to examine the impact of the reform on both demand and market power. Our results suggest that the index price helped to increase the market shares of generic drugs and succeeded in triggering price competition.

Keywords: Discrete choice; demand for pharmaceuticals; monopolistic competition; evaluation of yardstick based price regulation (search for similar items in EconPapers)
JEL-codes: C35 D43 I18 L11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-dcm, nep-hea, nep-mic, nep-mkt and nep-reg
Date: 2009-06-04
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.hero.uio.no/publicat/2006/HERO2006_1.pdf (application/pdf)

Related works:
Journal Article: Price regulation and generic competition in the pharmaceutical market (2006) Downloads
Working Paper: Price regulation and generic competition in the pharmaceutical market (2005) Downloads
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:hhs:oslohe:2006_001

Access Statistics for this paper

More papers in HERO Online Working Paper Series from University of Oslo, Health Economics Research Programme HERO / Department of Health Management and Health Economics P.O. Box 1089 Blindern, N-0317 Oslo, Norway. Contact information at EDIRC.
Bibliographic data for series maintained by Kristi Brinkmann Lenander ().

 
Page updated 2019-10-16
Handle: RePEc:hhs:oslohe:2006_001