Vaccine Supply: Effects Of Regulation And Competition
Patricia Danzon and
Nuno Sousa Pereira
No 17205, NBER Working Papers from National Bureau of Economic Research, Inc
In US vaccine markets, competing producers with high fixed, sunk costs face relatively concentrated demand. The resulting price and quality competition leads to the exit of all but one or very few producers per vaccine. Our empirical analysis of exits from US vaccine markets supports the hypothesis that high fixed costs and both price and quality competition contribute to vaccine exits. We find no evidence that government purchasing has significant effects, possibly because government purchase tends to increase volume but lower price, with offsetting effects. Evidence from the flu vaccine market confirms that government purchasing is not a necessary condition for exits and the existence of few suppliers per vaccine in the US.
JEL-codes: D4 I11 I18 L11 (search for similar items in EconPapers)
Note: HC HE
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Published as Patricia Danzon & Nuno Sousa Pereira, 2011. "Vaccine Supply: Effects of Regulation and Competition," International Journal of the Economics of Business, Taylor and Francis Journals, vol. 18(2), pages 239-271.
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