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dc.contributor.authorBrekke, Kurt R.en_US
dc.contributor.authorKoenigbauer, Ingriden_US
dc.contributor.authorStraume, Odd Runeen_US
dc.date.accessioned2006-10-18en_US
dc.date.accessioned2009-07-28T08:13:08Z-
dc.date.available2009-07-28T08:13:08Z-
dc.date.issued2006en_US
dc.identifier.urihttp://hdl.handle.net/10419/25870-
dc.description.abstractWe consider a therapeutic market with potentially three pharmaceutical firms. Two of the firms offer horizontally differentiated brand-name drugs. One of the brand-name drugs is a new treatment under patent protection that will be introduced if the profits are sufficient to cover the entry costs. The other brand-name drug has already lost its patent and faces competition from a third firm offering a generic version perceived to be of lower quality. This model allows us to compare generic reference pricing (GRP), therapeutic reference pricing (TRP), and no reference pricing (NRP). We show that competition is strongest under TRP, resulting in the lowest drug prices (and medical expenditures). However, TRP also provides the lowest profits to the patent-holding firm, making entry of the new drug treatment least likely. Surprisingly, we find that GRP distorts drug choices most, exposing patients to higher health risks.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper 1825en_US
dc.subject.jelI11en_US
dc.subject.jelL13en_US
dc.subject.jelL51en_US
dc.subject.jelL65en_US
dc.subject.ddc330en_US
dc.subject.stwPharmazeutisches Produkten_US
dc.subject.stwPreiswettbewerben_US
dc.subject.stwProduktdifferenzierungen_US
dc.subject.stwTheorieen_US
dc.titleReference pricing of pharmaceuticalsen_US
dc.typeWorking Paperen_US
dc.identifier.ppn518892867en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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