Suchergebnisse

Abstract
Price strategies are essential to balance timely access to drugs with expenditure containment. This is especially true for personalised drugs, whose effectiveness is heterogeneous across patients. For these drugs, some authors suggest to use Indication Based Price schemes (IBPs), while others argue that Performance-Based managed entry Agreements (PBAs) are more appropriate. We develop a theoretical model to compare the welfare properties of IBPs and PBAs in an environment where effectiveness is uncertain. The manufacturer observes heterogeneity in patients responses, but this information may be non verifiable. By contrast, the regulator can only observe data presented for listing purposes. We show that IBPs may allow to treat the efficient number of patients only if the social value of the drug is entirely appropriated by the manufacturer. PBAs may allow a fairer distribution of the social value, but their success depends on the contract rules and on the degree of uncertainty.

ABSTRACTIn this study, we analyze the regulation of markets for the provision of services whose costs are subsidized for paternalistic reasons. We model the choice of a benevolent regulator who wants to maximize consumer welfare in a setting where quality cannot be verified and the good provided is fully subsidized. The choice is thus made between two types of providers (profit maximizers and altruistic providers) and two frameworks (monopoly franchise and quality competition). Our analysis shows that in this environment the performance of mixed markets is always dominated by pure forms. Moreover, although making efficient providers compete for the market minimizes cost, the choice of quality competition with altruistic providers may be preferable from a welfare point of view whenever service quality is relevant and the productivity differential is not substantial.