Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/284301 
Year of Publication: 
2023
Series/Report no.: 
Working Paper No. 951
Publisher: 
Queen Mary University of London, School of Economics and Finance, London
Abstract: 
We study the effects of competition by state-owned firms, leveraging the decentralized entry of public pharmacies to local markets in Chile. Public pharmacies sell the same drugs at a third of private pharmacy prices, because of stronger upstream bargaining and market power in the private sector, but are of lower quality. Public pharmacies induced market segmentation and price increases in the private sector, which benefited the switchers to the public option but harmed the stayers. The countrywide entry of public pharmacies would reduce yearly consumer drug expenditure by 1.6 percent.
JEL: 
D72
H4
I16
L3
Document Type: 
Working Paper

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