Price and welfare effects of a pharmaceutical substitution reform
2010 (English)In: Journal of Health Economics, ISSN 0167-6296, E-ISSN 1879-1646, Vol. 29, no 6, 856-865 p.Article in journal (Refereed) Published
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 that generic entry has on brand-name prices by a factor of 10. 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.
Place, publisher, year, edition, pages
2010. Vol. 29, no 6, 856-865 p.
drugs, generic competition, equivalent variation, demand estimation
Research subject Economics
IdentifiersURN: urn:nbn:se:umu:diva-37150DOI: 10.1016/j.jhealeco.2010.08.003ISI: 000284671600007OAI: oai:DiVA.org:umu-37150DiVA: diva2:358094