The economics of the public option: evidence from local pharmaceutical markets

The economics of the public option: evidence from local pharmaceutical markets

Collection:
Health Policy and Services Research
Series Title(s):
Working paper (Stanford Institute for Economic Policy Research)
Author(s):
Atal, Juan Pablo, author
González, Felipe, author
Cuesta, Jose Ignacio, author
Otero, Cristóbal, author
Contributor(s):
Stanford Institute for Economic Policy Research, issuing body.
Publication:
[Stanford, CA] : Stanford Institute for Economic Policy Research (SIEPR), October 2021
Language(s):
English
Format:
Text
Subject(s):
Pharmacies -- economics
Public Sector -- economics
Cost Savings
Chile
United States
Genre(s):
Technical Report
Abstract:
We study the effects of competition by state-owned firms, leveraging the decentralized entry of public pharmacies to local markets in Chile. Public pharmacies sell the same drugs at a third of private pharmacy prices, because of stronger upstream bargaining and downstream market power in the private sector, but are of lower quality. Public pharmacies induced market segmentation and price increases in the private sector, benefiting the switchers to the public option but harming the stayers. The countrywide entry of public pharmacies would reduce yearly consumer drug expenditure by 1.6 percent, which outweighs the costs of the policy by 52 percent.
Copyright:
Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY-NC-ND license. (More information)
Extent:
1 online resource (1 PDF file (42, xxvi pages))
Illustrations:
Illustrations
NLM Unique ID:
9918383986106676 (See catalog record)
Permanent Link:
http://resource.nlm.nih.gov/9918383986106676