How Much Does a Medical Provider Earn from the Prescription Drugs: Evidence from Taiwan?
2013/09/10
研討會日期 : 2013-09-10
時間 : 14:30
主講人 : Professor Ya-Ming Liu
地點 : Conference Room B110
演講者簡介 : Ya-Ming Liu received her Ph.D. in Applied Economics from University of Minnesota at Twin Cities in 2003. She is currently Associate Professor of Economics at National Cheng Kung University. Her research fields are health economics and industrial organization.
演講摘要 : This paper empirically estimates the magnitude and the associated determinants of profit margins that medical providers earn from prescription drugs in the context of Taiwan’s pharmaceutical market where physicians both prescribe and dispense drugs. By tracing the difference between retail prices and wholesale prices to calculate the profit margins for 796 pharmaceutical products, we find evidence that the suppliers of generic drugs tend to offer higher price discounts to medical providers than the suppliers of brand-name drugs. This finding indicates that generic firms are more likely to use the strategy of price competition by lowering their wholesale prices to gain their market share as compared with branded firms. In addition, we find that the countervailing power in the wholesale pharmaceuticals as measured by the discount rate offered by the pharmaceutical manufacturers is positively associated with the degree of competition in the pharmaceutical market and the size of the market. Our results imply that the profit-seeking behavior initiated by the medical provider is the engine of the competition force in the prescription drug market in Taiwan, which in turn creates financial incentives for medical providers in terms of the choice of prescription drugs.
