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Reforming the Swedish pharmaceuticals market: Consequences for costs per defined daily dose
Umeå University, Faculty of Social Sciences, Department of Economics.ORCID iD: 0000-0003-4467-8676
2016 (English)In: International Journal of Health Economics and Management, ISSN 2199-9023, E-ISSN 2199-9031, Vol. 16, no 3, 201-214 p.Article in journal (Refereed) Published
Abstract [en]

In 2009 and 2010, the Swedish pharmaceuticals market was reformed. One of the stated policy goals was to achieve low costs for pharmaceutical products dispensed in Sweden. We use price and sales data for off-patent brand-name and generic pharmaceuticals to estimate a log-linear regression model, allowing us to assess how the policy changes affected the cost per defined daily dose. The estimated effect is an 18 % cost reduction per defined daily dose at the retail level and a 34 % reduction in the prices at the wholesale level (pharmacies’ purchase prices). The empirical results suggest that the cost reductions were caused by the introduction of a price cap, an obligation to dispense the lowest-cost generic substitute available in the whole Swedish market, and the introduction of well-defined exchange groups. The reforms thus reduced the cost per defined daily dose for consumers while being advantageous also for the pharmacies, who saw their retail margins increase. However, pharmaceutical firms supplying off-patent pharmaceuticals experienced a clear reduction in the price received for their products.

Place, publisher, year, edition, pages
Konkurrensverket , 2016. Vol. 16, no 3, 201-214 p.
Keyword [en]
Pharmaceutical industry, National pharmacy monopoly, Pharmacy deregulation Competition, Generics Pricing
National Category
Research subject
URN: urn:nbn:se:umu:diva-113768OAI: diva2:889690
Swedish Competition Authority
Available from: 2015-12-28 Created: 2015-12-28 Last updated: 2016-09-26Bibliographically approved

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