Retail Price Regulation and Innovation: Reference Pricing in the Pharmaceutical Industry1
نویسندگان
چکیده
Our paper is a rst attempt to evaluate the long run impact of reference pricing on pharmaceutical innovation, health and expenditures. The model is based on a dynamic game involving three types of agents: pharmaceutical rms, consumers and a regulatory entity. Pharmaceutical rms choose the level of research investment and its innovative content, then negotiate introductory prices for new drugs with the regulator. Reference pricing a¤ects negatively the intensity of research and it also modi es the types of innovations that are brought to the market, deterring small innovations. The model is calibrated with a small data on statins in France. Our results suggest that reference pricing typically generates a decline in health, whereas discounted expenditures may decrease or increase, depending on the degree of deterrence of cost reducing innovations.
منابع مشابه
Retail price regulation and innovation: reference pricing in the pharmaceutical industry.
Our paper is a first attempt to evaluate the long run impact of reference pricing on pharmaceutical innovation, health and expenditures. The model is based on a dynamic game involving three types of agents: pharmaceutical firms, consumers and a regulatory entity. Pharmaceutical firms choose the level of research investment and its innovative content, then negotiate introductory prices for new d...
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