Reference pricing systems on the pharmaceutical market

Unsorg, Maximiliane

doi:10.1515/ger-2020-0105

Cited by 1 publication

(1 citation statement)

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“…Moodley and Suleman assessed the impact of South Africa's Single Exit Price policy on generic medicines, analyzing price trends pre-and post-policy implementation [52]. Unsorg examined the effects of reference pricing systems on prices, consumer and producer surplus, and welfare in the pharmaceutical market [53]. Kanavos et al assessed the impact of external reference pricing (ERP) policies on healthcare objectives, analyzing its efficiency and unintended consequences [54].…”

Section: Literature Reviewmentioning

confidence: 99%

Regulated pricing decisions and diagnostic test choices in personalized medicine: Navigating the implications within legal frameworks

Cui,

Liu,

Feng

et al. 2024

Preprint

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Background: This study investigates the interplay between the government’s regulated pricing decisions and drug manufacturers’ diagnostic test choices in personalized medicine. The focus is on understanding the impact of government intervention on pharmaceutical companies’ strategic decisions, particularly in choosing partnerships with diagnostic firms at different levels. Methods: A stylized analytical model was developed, employing game-theoretic principles. This approach provided a nuanced understanding of the market forces and the economic implications of these strategic decisions. Results: The study reveals that in the absence of government-regulated pricing , drug manufacturers benefit from partnering with high-level diagnostic firms, enhancing consumer surplus and social welfare. However, when the government regulates pricing, the choice of partnering with a high-level diagnostic firm depends on specific conditions, such as low patient sensitivity to treatment failure and a low unit cost coefficient of diagnostic effort. The government’s decision to regulate prices is influenced by three key parameters: patients’ sensitivity to treatment failure, the unit cost coefficient of the diagnostic test effort, and the proportion of the price of specialized drugs in the regulated pricing. Conclusion: The findings underscore the importance of legal frameworks in the personalized medicine industry. The absence of the government’s regulated pricing incentivizes collaborations with high-level diagnostic firms, enhancing consumer surplus and social welfare. However, government intervention in pricing makes such decisions contingent on specific conditions, requiring nuanced regulatory policies that balance the interests of patients, manufacturers, and diagnostic firms.

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Section: Literature Reviewmentioning

confidence: 99%