The European Journal of Health Economics

, Volume 14, Issue 6, pp 959–969 | Cite as

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

Original Paper

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.

Keywords

Policy impact Pharmaceutical policy Reference pricing Italy 

JEL Classification

I18 L51 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2012

Authors and Affiliations

  • Simone Ghislandi
    • 1
  • Patrizio Armeni
    • 2
  • Claudio Jommi
    • 2
    • 3
  1. 1.Econpubblica, Department of Policy Analysis and Public ManagementBocconi UniversityMilanItaly
  2. 2.Centre for Research on Health and Social Care ManagementBocconi UniversityMilanItaly
  3. 3.Department of Pharmaceutical SciencesUniversità del Piemonte OrientaleNovaraItaly

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