On the welfare analysis of external reference pricing and reimbursement policy
Dong Van-Chung,
Lin Yan-Shu,
Shih Pei-Cyuan
Abstract:The co-existence of external referencing pricing (ERP) and reimbursement policy is common in many countries. Thus, this research examines whether or not the imposition of ERP is socially desirable in the presence of reimbursement policy. For direct sales channel, we find that the home social welfare is worse-off with ERP if the home copayment rate is too high. Our main results are robust under indirect sales channel. Moreover, the home social welfare under the pharmacypurchasing-price (PPP) ERP is larger than … Show more
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