title: Entry and regulation: evidence from health care professions.
abstract: In many countries, pharmacies receive high regulated markups and are protected from competition through geographic entry restrictions. We develop an empirical entry model for pharmacies and physicians with two features: entry restrictions and strategic complementarities. We find that the entry restrictions have directly reduced the number of pharmacies by more than 50%, and also indirectly reduced the number of physicians by about 7%. A removal of the entry restrictions, combined with a reduction in the regulated markups, would generate a large shift in rents to consumers, without reducing the availability of pharmacies. The public interest motivation for the current regime therefore has no empirical support.
authors: Tilburg University, TILEC. catherine.schaumans@uvt.nl
authors: Catherine
authors: C
authors: Schaumans
authors: Frank
authors: F
authors: Verboven
mesh_terms: D001530:Belgium; D004465:Economic Competition; D005843:Geography; D033161:Government Regulation; D018166:Health Care Reform; D019981:Health Care Sector; D006801:Humans; D007885:Legislation, Pharmacy; D017059:Models, Econometric; D010594:Pharmacies / Q000331:legislation & jurisprudence / Q000592:standards / Q000600:supply & distribution*; D010820:Physicians / Q000191:economics / Q000331:legislation & jurisprudence / Q000600:supply & distribution*; D012040:Regional Health Planning