Reference pricing and cost-sharing: Theory and evidence on German off-patent drugs

Konferenzbeitrag

This paper evaluates the impact of reference pricing on prices and co-payments in the (German) market for off-patent pharmaceuticals. We present a theoretical model with price-sensitive and loyal consumers that shows that a decrease in the reference price affects the consumers' co-payments in a non-monotonic way: For high reference prices, a marginally lower reference price may lead to lower co-payments. However, for low reference prices a further reduction may result into higher consumer co-payments. We use quarterly data on reference priced drugs covered by the social health insurance in Germany over the period 2007 - 2010 to analyze the empirical effects of reference price reductions. We find that, while prices decrease due to the reduction, co-payments behave non-monotonically and indeed increase if the reference price is sufficiently low.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2014: Evidenzbasierte Wirtschaftspolitik - Session: Health III ; No. C10-V1

Classification and Topics

• Classification: Wirtschaft ; Health: Government Policy; Regulation; Public Health ; Analysis of Health Care Markets ; Oligopoly and Other Imperfect Markets

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Herr, Annika ; Stühmeier, Torben ; Wenzel, Tobias
• Event: Veröffentlichung
• (who): ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
• (where): Kiel und Hamburg
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/100556
• Last update: 10.03.2025, 11:42 AM CET