The Strategic Response By Pharmaceutical Firms to The Medicaid Most-Favored-Customer Rules  

Oleh:

Morton, Fiona Scott

Jenis: Article from Bulletin/Magazine
Dalam koleksi: The Rand Journal of Economics vol. 28 no. 2 (1997), page 269-290.
Topik: PHARMACEUTICAL INDUSTRY; strategic response; pharmaceutical firms; medicaid; most - favored - customer rules

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: RR10.1 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

In 1991 a most - favored - customer (MFC) rule was adopted to govern pharmaceutical prices paid by medicaid. Theoretical models show that an MFC rule commits a firm to compete less aggressively in prices. I find that the price of branded products facing generic competition rose (4% on average). Brands protected by patents did not significantly increasein rice. Generics in concentrated markets should display a strategic response to the brand's adoption of the MFC : I find that generic girms raise price more as their markets become concentrated. Hospital prices show little change. The results suggest that the MFC rule caused higher prices for some pharmaceutical customers.

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