Reference pricing system and competition: case study from Portugal.
OBJECTIVE
To characterize the patterns of competition for a sample of drugs in the Portuguese pharmaceutical market before (January 2002-March 2003) and after (April 2003-June 2003) the introduction of the reference pricing system (RPS).


METHODS
We performed a descriptive, retrospective, longitudinal analysis, with monthly observations from January 2002 until June 2003 of 15 homogeneous groups. The groups represented the upper limit of public pharmaceutical expenditure in the RPS segment in 2003 (n=270). Measures of competition were: 1) number of presentations; 2) prescriptions' concentration in the generic and originator (brand) segments, using Herfindahl-Hirschman Index (HHI); and 3) dominant positions of market leader in the homogeneous group. A correlation analysis between the number of presentations, the HHI, and the dominant position of the market leader was performed using Pearson coefficient of correlation.


RESULTS
The structure of the market changed with the introduction of RPS. We found an increasing number of generic presentations (from 4+/-3 to 7+/-4; mean+/-standard deviation) and a decrease in the HHI for the generics market segment (from 0.7+/-0.2 to 0.6+/-0.3). There was a negative correlation between those variables that increased after the introduction of RPS (from -0.6 to -0.8). The HHI for brands and the dominant positions remained unchanged.


CONCLUSIONS
After the implementation of RPS, the increased competition was mainly driven by economic and social agents in the generics market segment but not in the brands market segment.
Health Sciences Department, Lusófona University of Humanities and Technology, Lisboa, Portugal. conceicao.portela@ulusofona.pt
Conceiçăo
C
Portela
D003363:Cost Control; D016527:Drug Costs / Q000639:trends*; D016568:Drugs, Generic / Q000191:economics; D004465:Economic Competition; D005102:Health Expenditures; D006801:Humans; D008137:Longitudinal Studies; D019982:Organizational Case Studies; D009936:Organizational Innovation; D011174:Portugal; D010818:Practice Patterns, Physicians'; D012051:Reimbursement Mechanisms; D012189:Retrospective Studies
D016568:Drugs, Generic