Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Wednesday, September 2, 2009

Price and welfare effects of a pharmaceutical substitution reform

Posted by D. Daniel Sokol

David Granlund (Department of Economics, Umeå University) explain Price and welfare effects of a pharmaceutical substitution reform.

ABSTRACT: The price effects of the Swedish pharmaceutical substitution reform are analyzed using data for a panel of all pharmaceutical product sold in Sweden in 1997—2007. The price reduction due to the reform was estimated to average 10% and was found to be significantly larger for brand name pharmaceuticals than for generics. The results also imply that the reform amplified the effect of generic entry has on brand-name prices by a factor of ten. Results of a demand-estimation imply that the price reductions increased total pharmaceutical consumption by 8% and consumer welfare by SEK 2.7 billion annually.

http://lawprofessors.typepad.com/antitrustprof_blog/2009/09/price-and-welfare-effects-of-a-pharmaceutical-substitution-reform.html

| Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef0120a5153ec2970b

Listed below are links to weblogs that reference Price and welfare effects of a pharmaceutical substitution reform:

Comments

Post a comment