EconPapers    
Economics at your fingertips  
 

A General-Equilibrium Analysis of Public Policy for Pharmaceutical Prices

Christina M.L. Kelton () and Robert Rebelein ()
Additional contact information
Christina M.L. Kelton: College of Business, University of Cincinnati, http://www.cba.uc.edu/faculty/keltonc/

No 78, Vassar College Department of Economics Working Paper Series from Vassar College Department of Economics

Abstract: Retail sales of prescription drugs totaled $154.5 billion in 2001. The National Institute for Health Care Management estimates annual sales will exceed $400 billion by the year 2010. This paper analyzes the welfare and distributional effects of two policy families that could be used to cope with high and rising pharmaceutical costs. We employ a general-equilibrium approach to contrast the current patented-monopoly system with a) a price ceiling imposed on the pharmaceutical sector of the economy; and b) a universal insurance program covering pharmaceutical purchases. We use a version of the Kelton and Wallace (1995) monopoly production environment: a two-good general-equilibrium model in which a license is required to produce one of the goods. Individuals in the model are heterogeneous with respect to preferences, but have identical production technologies and labor resources. Results indicate potential welfare gains for both the price-ceiling and universal-insurance policies, with very distinct distributional effects.

Date: 2005-11
New Economics Papers: this item is included in nep-hea and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://irving.vassar.edu/VCEWP/VCEWP78.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://irving.vassar.edu/VCEWP/VCEWP78.pdf [302 Redirect]--> http://economics.vassar.edu/VCEWP/VCEWP78.pdf [301 Moved Permanently]--> https://economics.vassar.edu/VCEWP/VCEWP78.pdf)

Related works:
Journal Article: A General‐Equilibrium Analysis of Public Policy for Pharmaceutical Prices (2007) 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:vas:papers:78

Access Statistics for this paper

More papers in Vassar College Department of Economics Working Paper Series from Vassar College Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sean Flynn ( this e-mail address is bad, please contact ).

 
Page updated 2021-02-23
Handle: RePEc:vas:papers:78