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Title:Regulation of pharmaceutical prices: Evidence from a reference price reform in Denmark PDF Logo
Authors:Kaiser, Ulrich
Mendez, Susan J.
Rønde, Thomas
Issue Date:2010
Series/Report no.:ZEW Discussion Papers 10-062
Abstract:On April 1, 2005, Denmark changed the way references prices, a main determinant of reimbursements for pharmaceutical purchases, are calculated. The previous reference prices, which were based on average EU prices, were substituted to minimum domestic prices. Novel to the literature, we estimate the joint effects of this reform on prices and quantities. Prices decreased more than 26 percent due to the reform, which reduced patient and government expenditures by 3.0 percent and 5.6 percent, respectively, and producer revenues by 5.0 percent. The prices of expensive products decreased more than their cheaper counterparts, resulting in large differences in patient benefits from the reform.
Subjects:pharmaceutical markets
regulation
co-payments
reference pricing
asymmetric welfare effects
JEL:I18
C23
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des ZEW
ZEW Discussion Papers

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