The Effects of Reference Pricing on Ex-factory Prices of Rx Drugs in Germany - A Panel Data Approach

Arbeitspapier

This paper examines effects of reference pricing for prescription drugs in German social health insurance based on econometric panel data methods. We analyze the effect on ex-factory prices. Moreover, we investigate whether manufacturers adapt prices of their products not subject to reference pricing as a consequence of changes in reference prices of their products subject to reference pricing.We use a large panel data set of nearly all German prescription drugs on a monthly basis between October 1994 and July 2005. Altogether, the data comprise almost 4 million observations. They provide information on ex-factory prices, reference prices, manufacturers, type of prescription drug, and market entries and exits. Our results show that there is no full price adjustment:A 1%-change in reference prices leads to a 0.3%-change in market prices. Price adjustment, however, is fast, it mostly happens in the first month. Furthermore, the first introduction of a reference price reduces market prices of the affected products by approximately 14%. Finally, we observe a significant time effect which is positive in the market without reference prices and negative in that with reference price.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: RWI Discussion Papers ; No. 46

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Analysis of Health Care Markets ; Health: Government Policy; Regulation; Public Health
• Thema: Price elasticity ; temporal development ; fixed effects model

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Augurzky, Boris ; Göhlmann, Silja ; Greß, Stefan ; Wasem, Jürgen
• Ereignis: Veröffentlichung
• (wer): Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)
• (wo): Essen
• (wann): 2006

Weitere Informationen

• Handle: http://hdl.handle.net/10419/18597
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ