External Price Benchmarking vs. Price Negotiation for Pharmaceuticals

Ackermann, Philipp (February 2010). External Price Benchmarking vs. Price Negotiation for Pharmaceuticals (Discussion Papers 10-04). Bern: Department of Economics

Preview

Text dp1004.pdf - Published Version Available under License Creative Commons: Attribution (CC-BY). Download (182kB) | Preview

External price benchmarking imposes a price cap for pharmaceuticals based on prices of identical products in other countries. Suppose that a regulatory agency can either directly negotiate drug prices with pharmaceutical manufacturers or implement a benchmarking regime based on foreign prices. Using a model where two countries differ only
in their market size, we show that a country prefers benchmarking if its agency has considerably less bargaining power compared to the agency in the other country. Assuming that bargaining power is positively correlated to country size, we find that only small countries
might have an incentive to engage in external price benchmarking. This incentive shrinks if population size grows.

Interest & Impact

Downloads

90 since deposited on 08 Oct 2020
23 in the past 12 months

Citations

5 Citations in Web of Science ®
6 Citations in Scopus

Search

in Google Scholar™

Services

Actions (login required)

Edit item

Actions (login required)

Edit item