scholarly journals On the Effect of Parallel Trade on Manufacturers' and Retailers' Profits in the Pharmaceutical Sector

Econometrica ◽  
2020 ◽  
Vol 88 (6) ◽  
pp. 2503-2545 ◽  
Author(s):  
Pierre Dubois ◽  
Morten Sæthre
Keyword(s):  
Prescription Drugs ◽  
Structural Model ◽  
Parallel Imports ◽  
European Economic Area ◽  
Parallel Trade ◽  
Demand Model ◽  
Reimbursement Price ◽  
Price Differentiation ◽  
Lump Sum ◽  
Arbitrage Opportunities

Differences in regulated pharmaceutical prices within the European Economic Area create arbitrage opportunities that pharmacy retailers can access through parallel imports. For prescription drugs under patent, parallel trade affects the sharing of profits among an innovating pharmaceutical company, retailers, and parallel traders. We develop a structural model of demand and supply in which retailers can choose the set of goods to sell, thus foreclosing consumers' access to less profitable drugs. This allows retailers to bargain and obtain lower wholesale prices from the manufacturer and parallel trader. With detailed transaction data from Norway, we identify a demand model with unobserved choice sets using retail‐side conditions for optimal assortment decisions of pharmacies. We find that retailer incentives play a significant role in fostering parallel trade penetration and that banning parallel imports would benefit manufacturers as well as prevent pharmacies from foreclosing the manufacturer's product. Finally, in the case of the statin market in Norway, we show that it would be possible to decrease spending and increase profits of the original manufacturer through lump sum transfers associated with a lower reimbursement price, thus decreasing price differentiation across countries.

scholarly journals Strategic Responses to Parallel Trade

2011 ◽  
Vol 11 (2) ◽  
Author(s):  
Margaret Kyle
Keyword(s):  
Parallel Imports ◽  
Parallel Trade ◽  
The European Union ◽  
Strategic Responses ◽  
Product Lines ◽  
Pharmaceutical Firms ◽  
Drug Prices ◽  
Arbitrage Opportunities ◽  
Price Discriminate ◽  
The Eu

Abstract High prices for patented pharmaceuticals have prompted many governments to consider allowing competition from “parallel imports,” or products first sold at lower prices in other countries. This paper examines how pharmaceutical firms have responded to changes in intellectual property rights and trade barriers that legalized parallel imports within the European Union (EU). The threat of arbitrage by parallel traders reduces the ability of firms to price discriminate across countries. Due to regulations on price and antitrust law on rationing supply, pharmaceutical firms may rely on non-price responses. Such responses include differentiation of products across countries and selective “culling” of product lines to reduce arbitrage opportunities, as well as raising arbitrageurs’ costs through choice of packaging. Using a dataset of drug prices and sales from 1993-2004 covering 30 countries, I find evidence that the behavior of pharmaceutical firms in the EU with respect to their product portfolios is consistent with attempts to reduce parallel trade. This may at least partially explain why parallel trade has not yet resulted in significant price convergence across EU countries. Accounting for non-price strategic responses may therefore be important in assessing the welfare effects of competition from parallel imports.

Why brand drugs priced higher than generic equivalents

2015 ◽  
Vol 9 (1) ◽  
pp. 3-19 ◽  
Author(s):  
Kathleen Iacocca ◽  
James Sawhill ◽  
Yao Zhao
Keyword(s):  
Prescription Drugs ◽  
Wholesale Price ◽  
Cost Savings ◽  
Brand Names ◽  
Insurance Companies ◽  
Demand Model ◽  
Generic Competition ◽  
Content Type ◽  
Pharmaceutical Manufacturers ◽  
Structural Demand

Purpose – This paper aims to investigate why brand-name drugs are priced higher than their generic equivalents in the US market. The authors hypothesize that some consumers have a preference for brand names, which outweighs the cost savings realized by switching to generics. Consumers may prefer a brand drug because the brand may have a higher perceived quality due to advertising and other promotional activities. Additionally, individuals are habitual in their consumption of prescription drugs, which leads to continued use of the brand in the face of generic competition. Design/methodology/approach – The authors develop a structural demand model and proceed to estimate it using wholesale price and demand data from the years 2000 through 2004. Findings – The results of our analysis reveal that customers have a strong preference for brand drugs. In addition, consumers exhibit high switching costs for prescription drugs. Originality/value – Considering the price and quantity of prescriptions filled each day, determining why brand drugs do not lower their prices to compete with their generic equivalents is an important question. Unfortunately, the existing literature only acknowledges this counter-intuitive business practice, but does not mathematically explain it. The authors address this knowledge gap in literature and provide important insight for all players in this industry including consumers, pharmaceutical manufacturers and health insurance companies.

scholarly journals How to Attract Physicians to Underserved Areas? Policy Recommendations from a Structural Model

2019 ◽  
Author(s):  
Francisco J M Costa ◽  
Letícia Nunes ◽  
Fábio Miessi Sanches
Keyword(s):  
Financial Incentives ◽  
Structural Model ◽  
Choice Model ◽  
Supply And Demand ◽  
Cost Effective ◽  
Medical Schools ◽  
Random Coefficients ◽  
Demand Model ◽  
Private And Public ◽  
Set Up

This paper exploits location choices of all generalist physicians graduated in Brazil between 2001 and 2013 to study policies aiming at increasing the supply of physicians in underserved areas. We set up and estimate a supply and demand model for physicians. We estimate physicians' locational preferences using a random coefficients discrete choice model. The demand has private establishments competing for physicians with private and public facilities around the country. Policy counterfactuals indicate that quotas in medical schools for students born in underserved areas and the opening of vacancies in medical schools in deprived areas are more cost-effective than financial incentives.

Seismic Fragility Assessment of Building with Metallic Hysteretic Damper in Consideration of Stiffness Ratio

2018 ◽  
Vol 765 ◽  
pp. 377-382
Author(s):  
Daniel Rumbi Teruna ◽  
Hendrik Wijaya
Keyword(s):  
Structural Model ◽  
Fragility Curves ◽  
Nonlinear Dynamic Analysis ◽  
Steel Structure ◽  
Seismic Energy ◽  
Cost Effective ◽  
Stiffness Ratio ◽  
Demand Model ◽  
Probabilistic Seismic Demand ◽  
Steel Damper

The application of hysteretic steel damper for seismic protection and rehabilitation has been recognized efficient and cost effective method in reducing structural responses under seismic events. The damper absorbs seismic energy through its hysteretic behaviour. This study aims to assess the vulnerability of building strengthened with hysteretic steel damper considering variability of stiffness ratio parameter in hysteretic steel damper for the application in six-story steel building. Probabilistic Seismic Demand Model (PSDM) for the structural model is developed by using nonlinear dynamic analysis under 30 ground motions. Furthermore, fragility curves are constructed based on inter-story drift and spectrum acceleration. Finally, the performance of the steel structure with and without hysteretic steel damper in addition to optimal stiffness ratio is presented and compared.

scholarly journals Strategic Patient Discharge: The Case of Long-Term Care Hospitals

2018 ◽  
Vol 108 (11) ◽  
pp. 3232-3265 ◽  
Author(s):  
Paul J. Eliason ◽  
Paul L. E. Grieco ◽  
Ryan C. McDevitt ◽  
James W. Roberts
Keyword(s):  
Financial Incentives ◽  
Structural Model ◽  
Patient Discharge ◽  
Prospective Payment System ◽  
Term Care ◽  
For Profit ◽  
Lump Sum ◽  
Dynamic Structural Model ◽  
Payment Policies

Medicare’s prospective payment system for long-term acute-care hospitals (LTCHs) provides modest reimbursements at the beginning of a patient’s stay before jumping discontinuously to a large lump-sum payment after a prespecified number of days. We show that LTCHs respond to the financial incentives of this system by disproportionately discharging patients after they cross the large-payment threshold. We find this occurs more often at for-profit facilities, facilities acquired by leading LTCH chains, and facilities colocated with other hospitals. Using a dynamic structural model, we evaluate counterfactual payment policies that would provide substantial savings for Medicare. (JEL H51, I11, I13, I18)

scholarly journals EU Enlargement, Parallel Trade and Price Competition in Pharmaceuticals: Has the Price Competition increased?

2016 ◽  
Vol 16 (2) ◽  
pp. 1069-1092
Author(s):  
David Granlund ◽  
Miyase Yesim Köksal-Ayhan
Keyword(s):  
Driving Force ◽  
Price Competition ◽  
Eu Enlargement ◽  
Consumer Perceptions ◽  
Parallel Imports ◽  
Parallel Trade ◽  
Price Difference ◽  
The Cost ◽  
Pharmaceutical Prices ◽  
The Eu

Abstract Given the cost of trade and availability of pharmaceuticals, the driving force for parallel trade is the price difference between the source (exporting) and the destination (importing) country. An increase in the price difference or in the availability of pharmaceuticals for parallel trade should increase price competition in the destination country. Using 2003–2007 data from Sweden we investigated whether EU enlargement in 2004, when new countries with low pharmaceutical prices joined the EU, increased competition from parallel imports. Drugs facing competition from parallel imports are found to have on average 19–22% lower prices than they would have had if they had never faced such competition. The EU enlargement is, however, not found to have increased this effect, which might be explained by derogations and changes in consumer perceptions of parallel imports.

Structure-property relations of liquid crystalline polymers

1987 ◽  
Vol 45 ◽  
pp. 460-463
Author(s):  
Linda C. Sawyer
Keyword(s):  
Solid State ◽  
Liquid Crystalline ◽  
Structural Model ◽  
Crystalline Polymer ◽  
Liquid Crystalline Polymers ◽  
Mechanical Anisotropy ◽  
Structure Property ◽  
Preparation Methods ◽  
Crystalline Polymers ◽  
Extended Chain

Recent liquid crystalline polymer (LCP) research has sought to define structure-property relationships of these complex new materials. The two major types of LCPs, thermotropic and lyotropic LCPs, both exhibit effects of process history on the microstructure frozen into the solid state. The high mechanical anisotropy of the molecules favors formation of complex structures. Microscopy has been used to develop an understanding of these microstructures and to describe them in a fundamental structural model. Preparation methods used include microtomy, etching, fracture and sonication for study by optical and electron microscopy techniques, which have been described for polymers. The model accounts for the macrostructures and microstructures observed in highly oriented fibers and films.Rod-like liquid crystalline polymers produce oriented materials because they have extended chain structures in the solid state. These polymers have found application as high modulus fibers and films with unique properties due to the formation of ordered solutions (lyotropic) or melts (thermotropic) which transform easily into highly oriented, extended chain structures in the solid state.

The Hierarchic Order of Intermediate Filament Structure and Assembly

1985 ◽  
Vol 43 ◽  
pp. 722-725
Author(s):  
U. Aebi ◽  
E.C. Glavaris ◽  
R. Eichner
Keyword(s):  
Tissue Specificity ◽  
Structural Model ◽  
Eukaryotic Cells ◽  
Cdna Sequencing ◽  
Filament Structure ◽  
Keratin Filaments ◽  
Isoelectric Points ◽  
Immunological Crossreactivity

Five different classes of intermediate-sized filaments (IFs) have been identified in differentiated eukaryotic cells: vimentin in mesenchymal cells, desmin in muscle cells, neurofilaments in nerve cells, glial filaments in glial cells and keratin filaments in epithelial cells. Despite their tissue specificity, all IFs share several common attributes, including immunological crossreactivity, similar morphology (e.g. about 10 nm diameter - hence ‘10-nm filaments’) and the ability to reassemble in vitro from denatured subunits into filaments virtually indistinguishable from those observed in vivo. Further more, despite their proteinchemical heterogeneity (their MWs range from 40 kDa to 200 kDa and their isoelectric points from about 5 to 8), protein and cDNA sequencing of several IF polypeptides (for refs, see 1,2) have provided the framework for a common structural model of all IF subunits.

An HREM study of superstructures in Ca4Al6SO16

1990 ◽  
Vol 48 (4) ◽  
pp. 1066-1067
Author(s):  
Y.G. Wang ◽  
H.Q. Ye ◽  
K.H. Kuo
Keyword(s):  
Calcium Aluminate ◽  
Structural Model ◽  
Bright Spot ◽  
Sulphur Atom ◽  
Synthetic Compound ◽  
Space Group ◽  
Lattice Images ◽  
Cubic Structure ◽  
Good Agreement

A synthetic compound Ca4Al6SO16 (usually abbreviated as C4A3S) obtained by mixing CaO, A12O3 and CaSO4 powders and finally sintered at 1380°C is a cement with excellent hydraulicity and greatly expanding in application. It is hydralysed rapidly by water to form predominatly calcium aluminate hydrates and therefore unlikly to occur naturally, although structurally it may be regarded as an end member of the sodalite-hauynite series of naturally occuring minerals. C4A3S has a cubic structure with ao=9.19Å and space group . Fig.1 is the projection viewed down axis, in which there are two sets of 8C position in , namely CaI and CaII, occupied by the calcium atoms, respectively, and the ratio of occupations in these two sets of positions is about 3:1. This suggests that the calcium atoms can freely occupy these sites in various degrees and usually they almost locates on the CaI positions. A through-focus series of the lattice images were found in good agreement with the simulated ones. Each bright spot in the image taken at Scherzer defocus correspounds to a colunm of sulphur atom in the structural model (Fig.1).

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