Healthy Skepticism Library item: 1972
Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.
Publication type: Journal Article
Pavenik N.
Do pharmaceutical prices respond to potential patient out-of-pocket expenses?
Rand J Econ 2002 Aut; 33:(3):469-87
http://www.ncbi.nlm.nih.gov/entrez/query.fcgi?cmd=Retrieve&db=pubmed&dopt=Abstract&list_uids=12585303
Abstract:
Despite the importance of patient insurance in the market for prescription pharmaceuticals, little is known about the impact of patient reimbursement on the pricing behavior of pharmaceutical firms. I examine the link between potential patient out-of-pocket expenses and pharmaceutical pricing using a unique policy experiment from Germany. Starting in 1989, a maximum reimbursement for a given medicine replaced a flat prescription fee. This change in reimbursement exposes the patient to the price of a prescribed product. Using a product-level panel data set covering several therapeutic categories before and after the policy change, I find that producers significantly decrease prices after the change in potential patient out-of-pocket expenses. Price declines are most pronounced for brand-name products. Moreover, branded products that face more generic competitors reduce prices more.
Keywords:
Drug Costs*
Drug Industry/economics
Drugs, Generic/economics
Economic Competition
Economics, Pharmaceutical*/trends
Fees, Pharmaceutical/trends
Financing, Personal*
Forecasting
Germany
Health Care Sector
Humans
Insurance, Pharmaceutical Services/economics*
Insurance, Pharmaceutical Services/trends
Models, Economic
Models, Theoretical
Rate Setting and Review/trends
United States
*longitudinal study
Germany
United States
drug prices
consumer drug prices
generics
INFLUENCE OF PROMOTION: CONSUMER DRUG COSTS
INFLUENCE OF PROMOTION: MARKET SHARE
PROMOTIONAL STRATEGIES: INDUSTRY
