Details
| Originalsprache | Englisch |
|---|---|
| Seiten (von - bis) | 1036-1057 |
| Seitenumfang | 22 |
| Fachzeitschrift | Health Economics (United Kingdom) |
| Jahrgang | 23 |
| Ausgabenummer | 9 |
| Frühes Online-Datum | 19 Aug. 2014 |
| Publikationsstatus | Veröffentlicht - Sept. 2014 |
| Extern publiziert | Ja |
Abstract
We investigate the welfare impact of parallel imports using a large panel dataset containing monthly information on sales, ex-factory prices, and further product characteristics for all 649 anti-diabetic drugs sold in Germany between 2004 and 2010. We estimate a two-stage nested logit model of demand, and on the basis of an oligopolistic model of multi-product firms, we then recover the marginal costs and markups. We finally evaluate the effect of the parallel imports' policy by calculating a counterfactual scenario without parallel trade. According to our estimates, parallel imports reduce the prices for patented drugs by 11% and do not have a significant effect on prices for generic drugs. This amounts to an increase in the demand-side surplus by €19 million per year (or €130 million in total), which is relatively small compared with the average annual market size of around €227 million based on ex-factory prices. The variable profits for the manufacturers of original drugs from the German market are reduced by €18 million (or 37%) per year when parallel trade is allowed, yet only one third of this difference is appropriated by the importers.
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in: Health Economics (United Kingdom), Jahrgang 23, Nr. 9, 09.2014, S. 1036-1057.
Publikation: Beitrag in Fachzeitschrift › Artikel › Forschung › Peer-Review
}
TY - JOUR
T1 - The welfare impact of parallel imports
T2 - A structural approach applied to the German market for oral anti-diabetics
AU - Duso, Tomaso
AU - Herr, Annika
AU - Suppliet, Moritz
PY - 2014/9
Y1 - 2014/9
N2 - We investigate the welfare impact of parallel imports using a large panel dataset containing monthly information on sales, ex-factory prices, and further product characteristics for all 649 anti-diabetic drugs sold in Germany between 2004 and 2010. We estimate a two-stage nested logit model of demand, and on the basis of an oligopolistic model of multi-product firms, we then recover the marginal costs and markups. We finally evaluate the effect of the parallel imports' policy by calculating a counterfactual scenario without parallel trade. According to our estimates, parallel imports reduce the prices for patented drugs by 11% and do not have a significant effect on prices for generic drugs. This amounts to an increase in the demand-side surplus by €19 million per year (or €130 million in total), which is relatively small compared with the average annual market size of around €227 million based on ex-factory prices. The variable profits for the manufacturers of original drugs from the German market are reduced by €18 million (or 37%) per year when parallel trade is allowed, yet only one third of this difference is appropriated by the importers.
AB - We investigate the welfare impact of parallel imports using a large panel dataset containing monthly information on sales, ex-factory prices, and further product characteristics for all 649 anti-diabetic drugs sold in Germany between 2004 and 2010. We estimate a two-stage nested logit model of demand, and on the basis of an oligopolistic model of multi-product firms, we then recover the marginal costs and markups. We finally evaluate the effect of the parallel imports' policy by calculating a counterfactual scenario without parallel trade. According to our estimates, parallel imports reduce the prices for patented drugs by 11% and do not have a significant effect on prices for generic drugs. This amounts to an increase in the demand-side surplus by €19 million per year (or €130 million in total), which is relatively small compared with the average annual market size of around €227 million based on ex-factory prices. The variable profits for the manufacturers of original drugs from the German market are reduced by €18 million (or 37%) per year when parallel trade is allowed, yet only one third of this difference is appropriated by the importers.
KW - anti-diabetic drugs
KW - parallel imports
KW - pharmaceuticals
KW - structural models
UR - http://www.scopus.com/inward/record.url?scp=84906318263&partnerID=8YFLogxK
U2 - 10.1002/hec.3068
DO - 10.1002/hec.3068
M3 - Article
C2 - 25139795
AN - SCOPUS:84906318263
VL - 23
SP - 1036
EP - 1057
JO - Health Economics (United Kingdom)
JF - Health Economics (United Kingdom)
SN - 1057-9230
IS - 9
ER -