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Pharmaceutical Pricing in Europe: Is Differential Pricing a Win-Win Solution?

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  • Patricia Danzon;Martina Garau;Adrian Towse

Abstract

This paper examines the potentially positive impact of differential pricing in Europe and the overall negative effects of international reference pricing (IRP) measures. The authors point out that IRP actually encourages higher prices in lower-income countries, can delay marketing/patient access in lower-price countries, and ultimately translates into less investment in R&D. Differential pricing assumes that countries with lower incomes should pay lower prices, encourages the earliest possible marketing in all countries, and provides incentives for innovation.

Suggested Citation

  • Patricia Danzon;Martina Garau;Adrian Towse, 2011. "Pharmaceutical Pricing in Europe: Is Differential Pricing a Win-Win Solution?," Occasional Paper 000191, Office of Health Economics.
    • Handle: RePEc:ohe:occpap:000191
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    File URL: https://www.ohe.org/publications/pharmaceutical-pricing-europe-differential-pricing-win-win-solution/attachment-349-pharmaceutical_pricing_in_europe_11-2-2011/
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    References listed on IDEAS

    as
    1. Patricia M. Danzon & Andrew J. Epstein, 2008. "Effects of Regulation on Drug Launch and Pricing in Interdependent Markets," NBER Working Papers 14041, National Bureau of Economic Research, Inc.
    2. Patricia M. Danzon & Andrew J. Epstein, 2012. "Effects of Regulation on Drug Launch and Pricing in Interdependent Markets," Advances in Health Economics and Health Services Research, in: The Economics of Medical Technology, pages 35-71, Emerald Group Publishing Limited.
    3. Patricia Danzon, 1997. "Trade and Price Differentials for Pharmaceuticals: Policy Options," Monograph 000430, Office of Health Economics.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Afschin Gandjour, 2013. "Reference Pricing and Price Negotiations for Innovative New Drugs," PharmacoEconomics, Springer, vol. 31(1), pages 11-14, January.
    2. Sabine Vogler, 2019. "Fair prices for medicines? Exploring competent authorities’ and public payers’ preferences on pharmaceutical policies," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(3), pages 443-469, August.

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    More about this item

    Keywords

    Pharmaceutical Pricing in Europe: Is Differential Pricing a Win-Win Solution?;

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health

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