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A model for the Dutch pharmaceutical market

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  • Erik Canton
  • Ed Westerhout

Abstract

This paper develops a general‐equilibrium model for the Dutch pharmaceutical market. The model derives the behaviour of patients, pharmacists, drug producers and parallel‐importers from microeconomic principles and recognizes the interactions between the various actors. The latter is important since the general‐equilibrium effects are sometimes at odds with intuition from a partial‐equilibrium approach. A calibrated version of the model is used to evaluate the effects of various policy experiments on the bill for pharmaceutical care in the Netherlands. These experiments include an incentive policy to encourage cost‐conscious drug distribution, an increase of copayments for pharmaceutical care, a reduction of trade barriers for parallel‐importers, and market entry by producers of generic substitutes. Copyright © 1999 John Wiley & Sons, Ltd.

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  • Erik Canton & Ed Westerhout, 1999. "A model for the Dutch pharmaceutical market," Health Economics, John Wiley & Sons, Ltd., vol. 8(5), pages 391-402, August.
    • Handle: RePEc:wly:hlthec:v:8:y:1999:i:5:p:391-402
    DOI: 10.1002/(SICI)1099-1050(199908)8:5<391::AID-HEC457>3.0.CO;2-7
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    References listed on IDEAS

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    1. Sara Ellison Fisher & Iain Cockburn & Zvi Griliches & Jerry Hausman, 1997. "Characteristics of Demand for Pharmaceutical Products: An Examination of Four Cephalosporins," RAND Journal of Economics, The RAND Corporation, vol. 28(3), pages 426-446, Autumn.
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    Cited by:

    1. Christina M. L. Kelton & Robert P. Rebelein, 2007. "A General‐Equilibrium Analysis of Public Policy for Pharmaceutical Prices," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(2), pages 285-318, April.
    2. Ed Westerhout & K. Folmer, 2002. "Financing medical specialist services in the Netherlands; welfare implications of imperfect agency," CPB Discussion Paper 6, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Ramesh Govindaraj & Gnanaraj Chellaraj, 2002. "The Indian Pharmaceutical Sector : Issues and Options for Health Sector Reform," World Bank Publications - Books, The World Bank Group, number 15231.
    4. Tamura, Masaoki & 田村, 正興, 2014. "Margin Rate Rule : A New Drug Pricing Policy in Japan," IIR Working Paper 14-03, Institute of Innovation Research, Hitotsubashi University.
    5. Ed Westerhout & K. Folmer, 2002. "Financing medical specialist services in the Netherlands; welfare implications of imperfect agency," CPB Discussion Paper 6.rdf, CPB Netherlands Bureau for Economic Policy Analysis.

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