Drug Launch Timing and International Reference Pricing

GATE Groupe d’Analyse et de Théorie Économique Lyon-St Étienne Working Paper WP 1301

28 Pages Posted: 30 Jan 2013

See all articles by Nicolas Houy

Nicolas Houy

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE)

Izabela Jelovac

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE)

Date Written: January 1, 2013

Abstract

This paper analyzes the timing decisions of pharmaceutical firms to launch a new drug in countries involved in international reference pricing. We show three important features of launch timing when all countries reference the prices in all other countries and in all previous periods of time. First, there is no withdrawal of drugs in any country and in any period of time. Second, there is no strict incentive to delay the launch of a drug in any country. Third, whenever the drug is sold in a country, it is also sold in all countries with larger willingness to pay. We then show that the three results do not hold when the countries only reference a subset of all countries. The first two results do not hold when the reference is on the last period prices only.

Keywords: Drug launch timing, international reference pricing

JEL Classification: I11, L65

Suggested Citation

Houy, Nicolas and Jelovac, Izabela, Drug Launch Timing and International Reference Pricing (January 1, 2013). GATE Groupe d’Analyse et de Théorie Économique Lyon-St Étienne Working Paper WP 1301, Available at SSRN: https://ssrn.com/abstract=2207816 or http://dx.doi.org/10.2139/ssrn.2207816

Nicolas Houy (Contact Author)

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE) ( email )

93, chemin des Mouilles
Ecully, 69130
France

Izabela Jelovac

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE) ( email )

93, chemin des Mouilles
Ecully, 69130
France

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