TITLE

Drug price regulation under consumer moral hazard. Two-part tariffs, uniform price or third-degree price discrimination?

AUTHOR(S)
Felder, Stefan
PUB. DATE
December 2004
SOURCE
European Journal of Health Economics;Dec2004, Vol. 5 Issue 4, p324
SOURCE TYPE
Academic Journal
DOC. TYPE
journal article
ABSTRACT
Drug price differences across national markets as they exist in the EU are often justified by the concept of Ramsey prices: with fixed costs for R&D, the optimal mark-ups on marginal costs are inversely related to the price elasticity in the individual markets. This well-known result prevails if consumer moral hazard is taken into account. Contrary to the situation without moral hazard, the uniform price does not necessarily dominate discriminatory pricing in welfare terms. The two-part tariff is a better alternative as it allows governments to address moral hazard. A uniform price combined with lump-payments reflecting differences in the willingness to pay and the moral hazard in member states appears to be an attractive option for a common EU drug market.
ACCESSION #
16356005

 

Related Articles

  • DRUG TRIPS. Gibbs, Lisa // Money;Sep2001, Vol. 30 Issue 9, p118 

    Details the trip of Americans who go to Canada to buy prescription drugs because of the high cost of drugs in the United States. How prescriptions can be filled for a three month supply and one refill; Issue of legality of the process, according to the U.S. Food and Drug Administration; Focus...

  • Tackling Rising Health Care Costs in Massachusetts. Ayanian, John Z.; Van der Wees, Philip J. // New England Journal of Medicine;8/30/2012, Vol. 367 Issue 9, p790 

    The article discusses a law in Massachusetts designed to control health care spending. The challenges facing the health care system that state leaders of Massachusetts wish to address include achieving near-universal insurance coverage and controlling rising health care costs to make gains in...

  • Why Doctors Dictate How Much the Government Pays Them. Sanger-Katz, Margot // National Journal;5/18/2013, p9 

    The article discusses how the Affordable Care Act would change the process for determining health care prices in the U.S. It describes establishment of the Relative Value Scale Update Committee (RUC) by the American Medical Association (AMA) in 1991 which became responsible for deciding on...

  • Controlling Spending for Prescription Drugs. Altman, Stuart H.; Parks-Thomas, Cindy // New England Journal of Medicine;3/14/2002, Vol. 346 Issue 11, p855 

    Editorial. Focuses on the cost of prescription drugs in the United States. Problems with the cost of drugs for those who do not have health insurance; Cost of drugs for the elderly; Study in this issue by Lewis et al on discount drug programs for the elderly; How improving the affordability of...

  • Drug cards offer big discounts, confusion. Murphy, Tom // Indianapolis Business Journal;4/19/2004, Vol. 25 Issue 6, p21 

    Provides information on Medicare-approved prescription discount cards in the U.S. Total number of private sponsors preparing the discount cards for use starting June 1, 2004; Decision of several pharmaceutical companies to extend discounts on their own drugs to people who have the cards;...

  • The Application of EU Competition Law in the Energy Sector. Scholz, Ulrich; Purps, Stephan // Journal of European Competition Law & Practice;Feb2013, Vol. 4 Issue 1, p63 

    2012 was a relatively quiet year in the enforcement of EU competition law in the energy sector by the European Commission which might change with the probe into Gazprom's market conduct.Sector inquiries into the different energy markets have become a tool of choice for many competition...

  • Little encouragement for hospitals from 340B changes. Gebhart, Fred // Drug Topics;8/20/2007, Vol. 151 Issue 16, p32 

    The article discusses the 340B Drug Pricing Program and its impact on the Health Resources and Services Administration, Centers for Medicare and Medicaid Services, and the Safety Net Hospitals for Pharmaceutical Access (SNHPA). It reports that the 340B program demands drugmakers to discount...

  • PROEKOLOGICZNE PODEJÅšCIE DO ENERGETYKI I JEJ WPŁYW NA HANDEL ZAGRANICZNY UNII EUROPEJSKIEJ. Fortuński, Bartosz // Research Papers of the Wroclaw University of Economics / Prace N;2012 Part 1, Issue 267, p200 

    This paper presents an analysis of energy sector in the EU, with regard to sustainable development and its impact on trade in the European Union. This approach to energetics on the one hand has a positive effect but on the other a negative impact on trade competitiveness of the EU. In order to...

  • A prescription for change. Testoni, Maureen // hfm (Healthcare Financial Management);Oct2015, Vol. 69 Issue 10, p30 

    The article focuses on the challenges related to the 340B drug discount program in Washington. It mentions that Health Resources and Services Administration (HRSA) provide more clarity on the rules in which the patients are eligible to receive 340B benefits. It mentions that healthcare attorneys...

Share

Read the Article

Courtesy of THE LIBRARY OF VIRGINIA

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics