Applied health economics and health policy
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Appl Health Econ Health Policy · Nov 2012
Do higher-priced generic medicines enjoy a competitive advantage under reference pricing?
In many countries with generic reference pricing, generic producers and distributors compete by means of undisclosed discounts offered to pharmacies in order to reduce acquisition costs and to induce them to dispense their generic to patients in preference over others. ⋯ Under reference pricing there is intense price competition among generic firms in the form of unusually high discounts to pharmacies on official ex-factory prices reimbursed to pharmacies. However, this effect is highly distorting because it favours those medicines with a higher relative price in relation to the brand price before generic entry.