The effect of reimbursement status changes on wholesale prices in the Nordic pharmaceutical markets

Abstract

This thesis focuses on the effect of pharmaceutical reimbursement status changes on the wholesale prices of pharmaceuticals sold in pharmacies in Finland, Norway, and Sweden in 2010-2017. Understanding the effect clarifies the incentives behind the pricing strategies of pharmaceutical companies. This can benefit the Nordic reimbursement status evaluation.

The effect and possible regulations affecting this relationship were first examined by a literature review. Then, Callaway and Sant'Anna (2021) and two-way fixed effects difference in differences analyses were conducted at introductions and removals of reimbursement statuses. The control groups consisted of untreated and matched pharmaceuticals from another country. The analyses were limited to six months preceding the treatment and six months following it with monthly country-product panel data.

The literature review highlighted mostly price-decreasing regulations utilized in or similar to the Nordics. The empirical analysis suggested sample dependently statistically significant price decreases associated with a reimbursement status that ranged between 12-36 % in Finland and 2-25 % in Sweden. No such association could be identified in Norway. Evidence on differences between branded and generic pharmaceuticals was limited, and thus it requires further research.

The inference and generalization of the results are limited by the requirements of the individual methods, the use of only pharmaceuticals with at least six months lasting reimbursement statuses, and the exclusion of unmatched products. The first problem is addressed by utilizing several estimation methods for robustness. The latter two problems can cause selection bias. Thus, it is recommended to use these results mostly in the context of multinational pharmaceuticals.