Price Regulation and Parallel Imports of Pharmaceuticals

Arbeitspapier

This paper studies the effects of price regulation and parallel imports in the on-patent pharmaceutical market. In a theory model where the producer price is subject to bargaining between the brand-name producer and a distributor, we show that the effects of stricter price regulation crucially depend on whether the producer faces competition from parallel imports. While parallel imports improve the bargaining position of the distributor, price regulation counteracts this effect and may even be pro.table for the producer. We test the implications of our model on a unique dataset with information on sales and prices at both producer and retail level for 165 substances over four years (2004-7). We show that stricter price regulation reduces competition from parallel imports, and has no (strictly negative) effect on producer profits in the presence (absence) of parallel imports. Our results suggest that price regulation might improve static efficiency without being harmful for dynamic e¢ ciency in the presence of parallel imports.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 5469

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Analysis of Health Care Markets ; Health: Government Policy; Regulation; Public Health ; Oligopoly and Other Imperfect Markets ; Economics of Regulation ; Chemicals; Rubber; Drugs; Biotechnology; Plastics
• Thema: pharmaceutical market ; price regulation ; parallel imports

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Brekke, Kurt R. ; Holmås, Tor Helge ; Straume, Odd Rune
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and ifo Institute (CESifo)
• (wo): Munich
• (wann): 2015

Weitere Informationen

• Handle: http://hdl.handle.net/10419/113796
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ