Objectives: The generic reference price (GRP) was introduced in Italy in 2001. The main purpose of this paper is: (a) producing evidence regarding the effect of GRP on prices; (b) testing the hypothesis that there is a reallocation of demand from the genericated (and reference-priced) molecules to patent-protected products that have the same therapeutic indication. Methods: The analysis used a unique dataset of quantities and revenues of six therapeutic groups that were observed for more than a decade. Difference-in-differences analysis is applied. Prices are adjusted for all the regulatory interventions in the ten years of observations, to control for confounding impact of these interventions. Results: On average, prices dropped 13 % more in groups to which GRP was applied than in other groups. Moreover, each entry of a new generic was associated with a price drop of around 2.8 %. On the other hand, GRP did not induce any significant switching towards in-patent molecules. Conclusions: We provide the first empirical results of the impact of GRP on prices in Italy and evidence that GRP cannot be held solely responsible for the often reported demand reallocation towards new and in-patent molecules

The impact of generic reference pricing in Italy, a decade on

GHISLANDI, SIMONE;ARMENI, PATRIZIO;JOMMI, CLAUDIO
2013

Abstract

Objectives: The generic reference price (GRP) was introduced in Italy in 2001. The main purpose of this paper is: (a) producing evidence regarding the effect of GRP on prices; (b) testing the hypothesis that there is a reallocation of demand from the genericated (and reference-priced) molecules to patent-protected products that have the same therapeutic indication. Methods: The analysis used a unique dataset of quantities and revenues of six therapeutic groups that were observed for more than a decade. Difference-in-differences analysis is applied. Prices are adjusted for all the regulatory interventions in the ten years of observations, to control for confounding impact of these interventions. Results: On average, prices dropped 13 % more in groups to which GRP was applied than in other groups. Moreover, each entry of a new generic was associated with a price drop of around 2.8 %. On the other hand, GRP did not induce any significant switching towards in-patent molecules. Conclusions: We provide the first empirical results of the impact of GRP on prices in Italy and evidence that GRP cannot be held solely responsible for the often reported demand reallocation towards new and in-patent molecules
File in questo prodotto:
Non ci sono file associati a questo prodotto.

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11565/3974554
 Attenzione

Attenzione! I dati visualizzati non sono stati sottoposti a validazione da parte dell'ateneo

Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 12
  • ???jsp.display-item.citation.isi??? 8
social impact