title: Launch prices for new pharmaceuticals in the heavily regulated and subsidized Spanish market, 1995-2007.
abstract: This paper provides empirical evidence on the explanatory factors affecting introductory prices of new pharmaceuticals in a heavily regulated and highly subsidized market. We collect a data set consisting of all new chemical entities launched in Spain between 1997 and 2005, and model launch prices following an extended version of previous economic models. We found that, unlike in the US and Sweden, therapeutically "innovative" products are not overpriced relative to "imitative" ones after having controlled for other factors. Price setting is mainly used as a mechanism to adjust for inflation independently of the degree of innovation. The drugs that enter through the centralized EMA approval procedure are overpriced, which may be a consequence of market globalization and international price setting.
authors.affiliation: Universitat Pompeu Fabra, Department of Economics and Business, Research Centre for Economics and Health (CRES), Barcelona, Spain. Electronic address: jaume.puig@upf.edu.
authors.forename: Jaume
authors.initials: J
authors.lastname: Puig-Junoy
authors.affiliation: Universidad de Las Palmas de GC, Department of Quantitative Methods in Management and Economics, Las Palmas, Canary Islands, Spain.
authors.forename: Beatriz González
authors.initials: BG
authors.lastname: López-Valcárcel
mesh_terms: D016527:Drug Costs / Q000331:legislation & jurisprudence* / Q000706:statistics & numerical data; D004345:Drug Industry / Q000191:economics / Q000331:legislation & jurisprudence; D004335:Drug and Narcotic Control; D005380:Financing, Government / Q000191:economics* / Q000331:legislation & jurisprudence / Q000706:statistics & numerical data; D006801:Humans; D018803:Models, Economic; D013030:Spain
keywords: Pharmaceuticals; Price competition; Price regulation