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Price competition in pharmaceuticals - Evidence from 1303 Swedish markets.
Umeå University.
Södertörn University, School of Social Sciences, Economics.ORCID iD: 0000-0001-5026-9479
2018 (English)In: Journal of Health Economics, ISSN 0167-6296, E-ISSN 1879-1646, Vol. 61, p. 1-12Article in journal (Refereed) Published
Abstract [en]

We study the short- and long-term price effects of the number of competing firms, using panel-data on 1303 distinct pharmaceutical markets for 78 months within a reference-price system. We use actual transaction prices in an institutional setting with little scope for non-price competition and where simultaneity problems can be addressed effectively. In the long term, the price of generics is found to decrease by 81% when the number of firms selling generics with the same strength, form and similar package size is increased from 1 to 10. Nearly only competition at this fine-grained level matters; the effect of firms selling other products with the same active substance, but with different package size, form, or strength, is only a tenths as large. Half of the price reductions take place immediately and 70% within three months. Also, prices of originals are found to react to competition, but far less and much slower.

Place, publisher, year, edition, pages
2018. Vol. 61, p. 1-12
Keywords [en]
Adjustment, Brand-name drugs, Dynamic, Generic drugs, Generic substitution, Pharmaceutical industry, Price competition, Reference price
National Category
Economics
Identifiers
URN: urn:nbn:se:sh:diva-36014DOI: 10.1016/j.jhealeco.2018.06.009ISI: 000447106100001PubMedID: 30007260Scopus ID: 2-s2.0-85049755573OAI: oai:DiVA.org:sh-36014DiVA, id: diva2:1233766
Available from: 2018-07-19 Created: 2018-07-19 Last updated: 2018-11-15Bibliographically approved

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Bergman, Mats A.

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CiteExportLink to record
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Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • harvard-anglia-ruskin-university
  • apa-old-doi-prefix.csl
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf