Squeezing the last drop out of your suppliers : an empirical study of market-based purchasing policies for generic pharmaceuticals

• We study the effect of the degree of exclusivity for the lowest bidder on the averageprice of generic pharmaceuticals in the short and long terms. Our results indicate that a1-percentage-point gain in market share of the lowest bidder reduces average costs by 0.2%in the short term and 0.8% in the long term, but also reduces the number of firms by 1%.We find that reducing the number of firms has a strong positive (and hence counteracting)effect on average prices, a 1% reduction raising prices by approximately 1%.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Nyckelord

Pharmaceutical industry

generic competition

generic drugs

brand-name drugs

nationalekonomi

Economics

General Microdata Analysis - retail

Publikations- och innehållstyp

ref (ämneskategori)

art (ämneskategori)