Reference pricing in the presence of pseudo-generics

  • Ricardo Gonçalves
  • Vasco Rodrigues
  • Hélder Vasconcelos
Article

Abstract

This paper looks at producers of branded and generic pharmaceuticals’ pricing decisions under two possible reimbursement schemes—reference pricing and fixed percentage reimbursement—and under two settings—one where the branded producer only sells the (off-patent) branded pharmaceutical and another where, in addition, it may also sell its own generic version, a so called pseudo-generic. We find different pricing responses from firms under the two reimbursement schemes and across the two settings analysed (with or without a pseudo-generic), and show that pseudo-generics may have an anticompetitive effect. Our results have important policy implications such as showing that the presence of pseudo-generics reinforces reference pricing’s advantages over alternative reimbursement schemes.

Keywords

Pseudo-generics Reference pricing Reimbursement schemes 

JEL Classification

I18 L13 

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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  • Ricardo Gonçalves
    • 1
  • Vasco Rodrigues
    • 2
  • Hélder Vasconcelos
    • 3
  1. 1.Faculdade de Economia e Gestão and CEGEUniversidade Católica PortuguesaPortoPortugal
  2. 2.Faculdade de Economia e GestãoUniversidade Católica PortuguesaPortoPortugal
  3. 3.Faculdade de EconomiaUniversidade do PortoPortoPortugal

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