title: Parallel imports and a mandatory substitution reform: a kick or a muff for price competition in pharmaceuticals?
abstract: What has been the effect of competition from parallel imports on prices of locally sourced on-patent drugs? Did the 2002 Swedish mandatory substitution reform increase this competition? To answer these questions, we carried out difference-in-differences estimation on monthly data for a panel of all locally sourced on-patent prescription drugs sold in Sweden during the 40 months from January 2001 to April 2004. On average, facing competition from parallel imports caused a 15-17% fall in price. While the reform increased the effect of competition from parallel imports, it was only by 0.9%. The reform, however, did increase the effect of therapeutic competition by 1.6%.
authors.affiliation: HUI Research, SE-103 29, Stockholm, Sweden. david.granlund@econ.umu.se.|Department of Economics, Umeå University, SE-901 87, Umeå, Sweden. david.granlund@econ.umu.se.
authors.forename: David
authors.initials: D
authors.lastname: Granlund
authors.affiliation: Department of Economics, School of Business, Economics and Law, University of Gothenburg, SE-405 30, Gothenburg, Sweden. miyaseyesim@gmail.com.
authors.forename: Miyase Yesim
authors.initials: MY
authors.lastname: Koksal-Ayhan
mesh_terms: D003132:Commerce / Q000706:statistics & numerical data*; D016527:Drug Costs / Q000706:statistics & numerical data; D057915:Drug Substitution / Q000191:economics; D016568:Drugs, Generic; D004465:Economic Competition / Q000706:statistics & numerical data*; D017850:Economics, Pharmaceutical / Q000331:legislation & jurisprudence* / Q000706:statistics & numerical data*; D006801:Humans; D055553:Prescription Drugs / Q000191:economics*; D013548:Sweden
chemical_list: D016568:Drugs, Generic; D055553:Prescription Drugs
keywords: Parallel imports; Pharmaceutical drugs; Price competition; Reference pricing; Therapeutic competition