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Retailing Policies for Generic Medicines

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  • Susana Narciso

Abstract

As there is general disagreement about the way generic medicines should be commercialized, two retailing policies are analyzed, taking into account their effects on the welfare of patients, government, pharmacies and physicians. In the first policy scenario, pharmacies are allowed to substitute generic medicines for branded ones, while in the second, substitution is forbidden. In both cases a pharmacies association is allowed to have a share in the production of generic medicines. The model predicts that under some conditions patients may prefer substitution by pharmacies but when doctors’ decisions are binding, they are never “excessively bad”. However, the policy choice belongs to the government, which prefers to allow for substitution more often than patients would like. Copyright Springer Science + Business Media, Inc. 2005

Suggested Citation

  • Susana Narciso, 2005. "Retailing Policies for Generic Medicines," International Journal of Health Economics and Management, Springer, vol. 5(2), pages 165-190, June.
    • Handle: RePEc:kap:ijhcfe:v:5:y:2005:i:2:p:165-190
    DOI: 10.1007/s10754-005-1865-5
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    References listed on IDEAS

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    1. Judith K. Hellerstein, 1994. "The Demand for Post-Patent Prescription Pharmaceuticals," NBER Working Papers 4981, National Bureau of Economic Research, Inc.
    2. Judith K. Hellerstein, 1998. "The Importance of the Physician in the Generic Versus Trade-Name Prescription Decision," RAND Journal of Economics, The RAND Corporation, vol. 29(1), pages 108-136, Spring.
    3. Lundin, Douglas, 2000. "Moral hazard in physician prescription behavior," Journal of Health Economics, Elsevier, vol. 19(5), pages 639-662, September.
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    Cited by:

    1. Carine Franc & Laurent Granier & Sébastien Trinquard, 2013. "Tarif forfaitaire de responsabilité : quels impacts sur le pharmacien ?," Working Papers 1309, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.

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