Reference Pricing of Pharmaceuticals for Medicare: Evidence from Germany, the Netherlands and New Zealand
Patricia Danzon and
Jonathan Ketcham
No 10007, NBER Working Papers from National Bureau of Economic Research, Inc
Abstract:
This paper describes three prototypical systems of therapeutic reference pricing (RP) for pharmaceuticals -- Germany, the Netherlands, and New Zealand -- and examines their effects on the availability of new drugs, reimbursement levels, manufacturer prices and out-of-pocket surcharges to patients. RP for pharmaceuticals is not simply analogous to a defined contribution approach to subsidizing insurance coverage. Although a major purpose of RP is to stimulate competition, theory suggests that this is unlikely and this is confirmed by the empirical evidence. Other effects of RP differ across countries in predictable ways, reflecting each country's system design and other cost control policies. New Zealand's RP system has reduced reimbursement and limited the availability of new drugs, particularly more expensive drugs. Compared to these three countries, if RP were applied in the US, it would likely have a more negative effect on prices of on-patent products, due to the more competitive US generic market, and a more negative effect on R&D and on the future supply of new drugs, due to the much larger US share of global pharmaceutical sales.
JEL-codes: I11 I18 (search for similar items in EconPapers)
Date: 2003-10
New Economics Papers: this item is included in nep-com, nep-edu and nep-eec
Note: IO
References: Add references at CitEc
Citations: View citations in EconPapers (21)
Published as Danzon, Patricia M. and Jonathan D. Ketcham. "Reference Pricing Of Pharmaceuticals For Medicare: Evidence From Germany, The Netherlands, and New Zealand," Forum for Health Economics and Policy, 2004, v7, Article 2.
Published as Reference Pricing of Pharmaceuticals for Medicare: Evidence from Germany, the Netherlands, and New Zealand , Patricia M. Danzon, Jonathan D. Ketcham. in Frontiers in Health Policy Research, Volume 7 , Cutler and Garber. 2004
Downloads: (external link)
http://www.nber.org/papers/w10007.pdf (application/pdf)
Related works:
Chapter: Reference Pricing of Pharmaceuticals for Medicare: Evidence from Germany, the Netherlands, and New Zealand (2004)
Journal Article: Reference Pricing of Pharmaceuticals for Medicare: Evidence from Germany, the Netherlands, and New Zealand (2004)
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:nbr:nberwo:10007
Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w10007
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by (wpc@nber.org).