Regulation of Pharmaceutical Prices: Evidence from a Reference Price Reform in Denmark

Ulrich Kaiser, Susan J. Mendez, Thomas Rønde

    Research output: Working paperResearch

    Abstract

    On April 1, 2005, Denmark changed the way references prices, a main determinant of reimbursements for pharmaceutical purchases, are calculated. The previous reference prices, which were based on average EU prices, were substituted to minimum domestic prices. Novel to the literature, we estimate the joint eects of this reform on prices and quantities. Prices decreased more than 26 percent due to the reform, which reduced patient and government expenditures by 3.0 percent and 5.6 percent, respectively, and producer revenues by 5.0 percent. The prices of expensive products decreased more than their cheaper counterparts, resulting in large dierences in patient benets from the reform.
    On April 1, 2005, Denmark changed the way references prices, a main determinant of reimbursements for pharmaceutical purchases, are calculated. The previous reference prices, which were based on average EU prices, were substituted to minimum domestic prices. Novel to the literature, we estimate the joint eects of this reform on prices and quantities. Prices decreased more than 26 percent due to the reform, which reduced patient and government expenditures by 3.0 percent and 5.6 percent, respectively, and producer revenues by 5.0 percent. The prices of expensive products decreased more than their cheaper counterparts, resulting in large dierences in patient benets from the reform.
    LanguageEnglish
    PublisherKøbenhavns Universitet
    Number of pages41
    StatePublished - 2010

    Keywords

      Cite this

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      Regulation of Pharmaceutical Prices : Evidence from a Reference Price Reform in Denmark. / Kaiser, Ulrich; Mendez, Susan J.; Rønde, Thomas.

      Københavns Universitet, 2010.

      Research output: Working paperResearch

      TY - UNPB

      T1 - Regulation of Pharmaceutical Prices

      T2 - Evidence from a Reference Price Reform in Denmark

      AU - Kaiser,Ulrich

      AU - Mendez,Susan J.

      AU - Rønde,Thomas

      PY - 2010

      Y1 - 2010

      N2 - On April 1, 2005, Denmark changed the way references prices, a main determinant of reimbursements for pharmaceutical purchases, are calculated. The previous reference prices, which were based on average EU prices, were substituted to minimum domestic prices. Novel to the literature, we estimate the joint eects of this reform on prices and quantities. Prices decreased more than 26 percent due to the reform, which reduced patient and government expenditures by 3.0 percent and 5.6 percent, respectively, and producer revenues by 5.0 percent. The prices of expensive products decreased more than their cheaper counterparts, resulting in large dierences in patient benets from the reform.

      AB - On April 1, 2005, Denmark changed the way references prices, a main determinant of reimbursements for pharmaceutical purchases, are calculated. The previous reference prices, which were based on average EU prices, were substituted to minimum domestic prices. Novel to the literature, we estimate the joint eects of this reform on prices and quantities. Prices decreased more than 26 percent due to the reform, which reduced patient and government expenditures by 3.0 percent and 5.6 percent, respectively, and producer revenues by 5.0 percent. The prices of expensive products decreased more than their cheaper counterparts, resulting in large dierences in patient benets from the reform.

      KW - Pharmaceutical Markets

      KW - Regulation

      KW - co-payments

      KW - Reference Pricing

      KW - Asymmetric Welfare Effects

      M3 - Working paper

      BT - Regulation of Pharmaceutical Prices

      PB - Københavns Universitet

      ER -