Price and welfare effects of a pharmaceutical substitution reform

David Granlund ()
Additional contact information
David Granlund: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden

No 777, Umeå Economic Studies from Umeå University, Department of Economics

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 of generic entry has on brand-name prices by a factor of ten. 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)
JEL-codes: D40 I11 L65 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2009-08-13
New Economics Papers: this item is included in nep-com, nep-hea, nep-mkt and nep-reg
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.econ.umu.se/DownloadAsset.action?conten ... Id=3&assetKey=ues777 (application/pdf)

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:hhs:umnees:0777

Access Statistics for this paper

More papers in Umeå Economic Studies from Umeå University, Department of Economics Department of Economics, Umeå University, S-901 87 Umeå, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by David Skog ().