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Parallel Imports and Mandatory Substitution Reform: a kick or a muff for price competition in pharmaceuticals?
Umeå University, Faculty of Social Sciences, Department of Economics. HUI Research, SE-103 29, Stockholm, Sweden.
2015 (English)In: European Journal of Health Economics, ISSN 1618-7598, E-ISSN 1618-7601, Vol. 16, no 9, 969-983 p.Article in journal (Refereed) Published
Abstract [en]

What has been the effect of competition from parallel imports on prices of locally-sourced on-patent drugs? Did the 2002 Swedish mandatory substitution reform increase this competition? To answer these questions, we carried out difference-in-differences estimation on monthly data for a panel of all on-patent prescription drugs sold in Sweden during the 40 months from January 2001 through April 2004. On average, facing competition from parallel imports caused a 15-17% fall in price. While the reform increased the effect of competition from parallel imports, it was only by 0.9%. The reform, however, did increase the effect of therapeutic competition by 1.6%.

Place, publisher, year, edition, pages
2015. Vol. 16, no 9, 969-983 p.
Keyword [en]
parallel imports, pharmaceutical drugs, price competition, reference pricing, therapeutic competition
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Research subject
URN: urn:nbn:se:umu:diva-47481DOI: 10.1007/s10198-014-0646-9ISI: 000369733800007OAI: diva2:442529
Swedish Competition Authority
Available from: 2011-09-21 Created: 2011-09-21 Last updated: 2016-03-16Bibliographically approved

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