Squeezing the Last Drop Out of Your Suppliers: An Empirical Study of Market‐Based Purchasing Policies for Generic Pharmaceuticals

Bergman, Mats; Granlund, David; Rudholm, Niklas

doi:10.1111/obes.12180

Cited by 8 publications

(7 citation statements)

References 48 publications

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“…Medicine prices in the private sectors were consistently higher than tender prices. This was similar to findings in other studies that proved tender medicine prices showed an overall decrease in medicine price [ (Baldi & Vannoni, 2015); (Bartels, 2016); (Bergman, et al, 2017); (Curto, et al, 2014); (Danzon, et al, 2015); (Kanavos, et al, 2009); (Petrou & Talias, 2014); (Raventos & Zolezzi, 2015) and ]. The most probable reason for this difference is the methodology adopted for the tendering process in the public sector.…”

Section: Discussionsupporting

confidence: 90%

A comparison study between public and private healthcare sector medicine prices in South Africa

Thaver

Padayachee

Bangalee

2021

Journal of Pharmaceutical Health Services Research

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Objectives The objectives of the study were to compare price trends, determine price differentials, and equate the average price index of a basket of medicines between the public and private healthcare sectors in South Africa. Methods A price list consisting of 32 essential medicines available in both the public and private healthcare systems of South Africa was chosen for this study. The price of medicines for the private sector were obtained from the Medicine Price Registry-Open Up website for the period 2014–2018. Public sector medicine prices were obtained from the Department of Health website for the corresponding period. Observations and price trends were identified and analyzed using Microsoft Excel version 2016. Key findings A total of 74 medicine brands were analyzed in the study. It was found that the prices across both sectors had increased over time, however, the majority of brands (87%) displayed higher prices in the private sector in comparison to the public sector. On average, the price differential between the private and public sector medicines were 395.47%. Conclusions The study found varying price differences between medicines in the public and private sectors because of the different methodologies used in each. The reasons for changes in medicine prices across the years in both sectors, could not always be clearly determined as both sectors lacked complete transparency in the processes applied to establish medicine prices. Therefore, more transparent medicine price systems need to be considered for the future of South Africa’s healthcare system as the country transitions toward universal health coverage.

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Section: Discussionsupporting

confidence: 90%

A comparison study between public and private healthcare sector medicine prices in South Africa

Thaver

Padayachee

Bangalee

2021

Journal of Pharmaceutical Health Services Research

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“…Thus, this paper contributes by studying the effects on individual prices and by doing this separately for generics and originals. Unlike Bergman, Granlund and Rudholm (2017), who implicitly assumed firms to have naïve expectations about the number of competitors, we also allow for rational expectations and find evidence consistent with this.…”

Section: Introductionmentioning

confidence: 73%

“…reduce the administrative fees in order to increase the number of active firms in small exchange groups. This paper relates to Bergman, Granlund and Rudholm (2017) which used part of the data used in this study to investigate how changing the market share for the lowest bidder affects the cost per defined dose.…”

Section: Introductionmentioning

confidence: 99%

Price competition in pharmaceuticals – Evidence from 1303 Swedish markets

Granlund

Bergman

2018

Journal of Health Economics

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We study the short- and long-term price effects of the number of competing firms, using panel-data on 1303 distinct pharmaceutical markets for 78 months within a reference-price system. We use actual transaction prices in an institutional setting with little scope for non-price competition and where simultaneity problems can be addressed effectively. In the long term, the price of generics is found to decrease by 81% when the number of firms selling generics with the same strength, form and similar package size is increased from 1 to 10. Nearly only competition at this fine-grained level matters; the effect of firms selling other products with the same active substance, but with different package size, form, or strength, is only a tenths as large. Half of the price reductions take place immediately and 70% within three months. Also, prices of originals are found to react to competition, but far less and much slower.

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“…This paper relates to Bergman et al (2017) and Granlund and Bergman (2018)both of which used dynamic models to study competition effects. However, these papers studied prices for off-patent pharmaceuticals and focused on the effects of competition from generic substitutes.…”

Section: Introductionmentioning

confidence: 99%

The Price Effects of Competition from Parallel Imports and Therapeutic Alternatives: Using Dynamic Models to Estimate the Causal Effect on the Extensive and Intensive Margins

Granlund

2021

Rev Ind Organ

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This paper studies responses to competition with the use of dynamic models that distinguish between short- and long-term price effects. The dynamic models also allow lagged numbers of competitors to become valid and strong instruments for the current numbers, which enables studying the causal effects using flexible specifications. A first parallel trader is found to decrease prices of exchangeable products by 7% in the long term. On the other hand, prices do not respond to the first competitor that sells therapeutic alternatives; but competition from four or more competitors that sell on-patent therapeutic alternatives decreases prices by about 10% in the long term.

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Squeezing the Last Drop Out of Your Suppliers: An Empirical Study of Market‐Based Purchasing Policies for Generic Pharmaceuticals

Cited by 8 publications

References 48 publications

A comparison study between public and private healthcare sector medicine prices in South Africa

A comparison study between public and private healthcare sector medicine prices in South Africa

Price competition in pharmaceuticals – Evidence from 1303 Swedish markets

The Price Effects of Competition from Parallel Imports and Therapeutic Alternatives: Using Dynamic Models to Estimate the Causal Effect on the Extensive and Intensive Margins

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