Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/50590 
Year of Publication: 
2009
Series/Report no.: 
Department of Economics Discussion Paper No. 09,02
Publisher: 
University of Kent, Department of Economics, Canterbury
Abstract: 
Governments often subsidize poorer groups in society to ensure their access to new drugs. We analyze here the optimal income-based price subsidies in a strategic environment. We show that asymmetric health systems can arise even though countries are ex-ante symmetric when international price discrimination is possible. Universal access is less likely to arise without price discrimination but also health policy coordination becomes more important. This is due to the multiple equilibria which make the attainment of universal coverage within a given income range ambiguous. We also show that an increase in intra-country inequality does not always lead to less likely universal coverage when international price discrimination is possible.
Subjects: 
health systems
pharmaceuticals
innovation
income based subsidies
price discrimination
JEL: 
D4
L1
I1
Document Type: 
Working Paper

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