Publication: The determinants of pricing in pharmaceuticals : are U.S. prices really higher than those of Canada?
Loading...
Identifiers
Publication date
2007-04
Defense date
Advisors
Tutors
Journal Title
Journal ISSN
Volume Title
Publisher
Impact
Export
Abstract
This paper studies price determination in pharmaceutical markets using data for 25 countries,
six years and a comprehensive list of products from the MIDAS IMS database. We show that
market power and the quality of the product has a significantly positive impact of prices. The
nationality of the producer appears to have a small and often insignificant impact on prices,
which suggests that countries which regulates prices have relatively little power to do it in a way
that advances narrow national interest. We produce a theoretical explanation for this
phenomenon based on the fact that low negotiated prices in a country would have a knock-on
effect in other markets, and is thus strongly resisted by producers. Another key finding is that
the U.S. has prices that are not significantly higher than those of countries with similar income
levels. This, together with the former observation on the effect of the nationality of producers
casts doubt on the ability of countries to pursue “free-riding" regulation.
Description
Keywords
Pharmaceutical prices