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.
    Original languageEnglish
    PublisherKøbenhavns Universitet
    Number of pages41
    Publication statusPublished - 2010

    Cite this

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    title = "Regulation of Pharmaceutical Prices: Evidence from a Reference Price Reform in Denmark",
    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.",
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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 -