Scandinavian Working Papers in Economics

HUI Working Papers,
HUI Research

No 21: Price and welfare effects of a pharmaceutical substitution reform

David Granlund ()
Additional contact information
David Granlund: The Swedish Retail Institute (HUI), Postal: Regeringsgatan 60, SE-103 29 Stockholm, Sweden

Abstract: The price effects of the Swedish pharmaceutical substitution reform are analyzed using data for a panel of all pharmaceutical product sold in Sweden in 1997--2007. The price reduction due to the reform was estimated to average 10% and was found to be significantly larger for brand name pharmaceuticals than for generics. The results also imply that the reform amplified the effect of generic entry has on brand-name prices by a factor of ten. Results of a demand-estimation imply that the price reductions increased total pharmaceutical consumption by 8% and consumer welfare by SEK 2.7 billion annually.

Keywords: drugs; generic competition; equivalent variarion; demand estimation

JEL-codes: D40; I11; L65

29 pages, April 7, 2009

Download statistics

Questions (including download problems) about the papers in this series should be directed to Hans Seerar Westerberg ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2024-02-05 17:11:41.