Externalities of national pharmaceutical policy when markets are integrated through parallel trade
نویسنده
چکیده
This paper studies externalities of nationally determined cost-sharing systems, in particular coinsurance rates (patients pay a percentage of the price), under pharmaceutical parallel trade, i.e. trade outside the manufacturers authorized distribution channel, in a two-country model with a vertical distributor relationship. Parallel trade generates a price-decreasing competition e¤ect in the destination country and a price-increasing double marginalization e¤ect in the source country. An increase of the coinsurance rates in the destination country of the parallel import mitigates the double marginalization e¤ect in the source country. An increase of the coinsurance rate in the source country reinforces the competition e¤ect in the destination country. JEL classi cation: F12, I11, I18
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